Today marks the beginning of the PM’s First Home Loan Deposit Scheme. Scott Morrison announced the scheme during the crucial last days of the May election campaign, stating it would allow first-time buyers to enter the market sooner by requiring them to save deposits as a little as 5 per cent.
While not every first-home buyer will be eligible, the scheme does have some great advantages. Firstly it enables first-time buyers to purchase homes with deposits as low as 5 per cent, and less than 20 per cent, without having to pay lenders’ mortgage insurance (LMI), which will save between $5,000 and $15,000. Normally all purchases with a deposit under 20% will require LMI costs. `The federal government will act as guarantor for the difference between the first-home buyers’ deposits and the 20 per cent threshold (eg. if a participant has a 5 per cent deposit, the government will act as guarantor for the remaining 15 per cent)
This is designed to allow first-home buyers to get into the market sooner, as the time it takes to save a deposit is considered one of the main barriers to home ownership. This is very good timing as the market is expected to rebound extremely quickly and strongly this year. The scheme is only available for singles with a taxable income for the previous financial year of $125,000 or less, and couples with a combined taxable income for the previous financial of $200,000 or less.
Those intending to buy with a relative or friend are not eligible and buyers must be Australian citizens aged at least 18 who’s never owned property before. As with the FHOG, buyers must intend to live in the property they buy, move in within six months of settlement (or the date an occupancy certificate is issued), and continue to live in the property as long as the home loan has a guarantee under the scheme. Buyers must also have a deposit of at least 5 per cent, but no more than 20 per cent, and a loan term of no more than 30 years.
Buyers can only buy residential properties either an established dwelling, a new-build dwelling bought under a house and land package, as land with a separate contract to build a home, or an off-the-plan arrangement
Properties must not exceed the $475,000 cap for the Gold Coast so Finnegan Heights Coomera offers many House & Land packages that qualify for the scheme. It is only available to the first 10,000 applications Australia wide. Contact Us for more information on 1300 657 646