With property prices still on the rise, many people are talking about how first home buyers are going to enter the housing market.
As we all know it is hard to save enough money for a deposit when the cost of living is going up, along with property prices. The federal budget has provided some relief with the introduction of 3 key measures to help first home buyer enter into the market.
- First home buyers deposit scheme (FHBS)
The governments first home buyer scheme will be boosted by another 10,000 places. As part of this scheme the buyer only requires a 5% deposit and the government will act as guarantor for the balance. As a result, first home buyers avoid mortgage insurance. This scheme is available through certain banks and lenders. Interested? You will need to be quick for this option as spots are secured extremely quickly after becoming available.
- First Home Super Saver Scheme (FHSS)
This was introduced in the federal budget in 2017, but now it has increased from $30,000 to $50,000. This scheme allows eligible first home buyers to dip into their Superannuation to withdraw up to $50,000 to use as a deposit towards an owner occupied purchase. The increase will take effect from 1st July 2022. Ultimately, what you are doing here is making voluntary contributions to your super either before or after tax and using these savings towards your deposit.
- Family Home Guarantee/ No Deposit Home Loan
This “guarantee” is aimed at helping single parents into home ownership. The guarantee enables eligible single parents to be able to build or buy a new home with only 2% deposit. You will need to be able to service the loan to be eligible. Places will start to become available from July 1, 2021. However, only 10,000 places will be available over 4 years nationally. So you will need to act quickly for this also.
In addition to the federal government’s initiatives, there are other measures available that help first home buyers enter into the market.
One of these is the ‘family guarantor’ or ‘family pledge’ option. Through the family guarantor/ family pledge home loan clients can achieve 100% of the required loan with 80% of the loan being secured against the property they are buying and the balance of 20% coming from the parent’s property. However, you will need to keep in mind you will need to still be able to service the whole debt.
The team at Better Homes and Gardens Home Loans are here to help find and secure the most suitable loan for you. Contact us today to find out more.
Author: Amanda Liszewski, Lending Specialist, Better Homes and Gardens Home Loans
**The information provided constitutes information which is general in nature and has not taken into account any of your personal objectives, financial situation, or needs, please feel free to give our lending specialists a call to see how we can help you.
** source: www.ato.gov.au, www.budget.gov.au,www.pwc.com.au/federal-budget
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