The clock is ticking for first home buyers

As many readers would be aware, first home buyers with a smaller deposit normally had to pay for Lender’s Mortgage Insurance, which can add several thousand dollars to your purchase costs. The First Home Loan Deposit Scheme means that the Government will effectively as a ‘guarantor’ for the loan for buyers with between 5% and 20% deposit.

There is a catch though…the new scheme is limited to the first 10,000 applicants each year. So, whilst the First Home Loan Deposit Scheme only commenced on January 1st this year, there are reports surfacing that there have already been more than 1000 applicants through the Commonwealth Bank alone! In fact, around 100,000 people buying their first home each year, so it seems that this year’s allocation will be oversubscribed quite quickly. That means that if you are planning on applying for assistance through the new scheme, you will need to move fast if you’d prefer not to wait until 2021!

If you’re not familiar with how the First Home Loan Deposit Scheme works, here’s a brief summary of the main features. Applicants need to be:

• Singles with a taxable income of not more than $125,000; or
• Couples with a combined taxable income of not more than $200,000.

It is also worth noting that if you are planning on purchasing your first home with another person who is not your spouse or defacto, (if you are buying a property with a parent or a sibling for example), then you will not be eligible for this scheme.

If you’d like to know more, you can go straight to the First Home Loan Deposit Scheme website. Keep in mind that this website is only intended as a guide, so it will not provide a guarantee of a loan from a participating lender.

More importantly, if you or someone you know would like some assistance in finding the right home, whether it is your first home or not, you talk to our helpful team at Barry Plant Preston and Northcote.