The election is over and the Liberal Government has won again. This is good news for investors who want to keep negative gearing their investment properties, but it's even better news for first home buyers who can't afford a deposit to purchase their first home.
Scott Morrison has pledged to help first home buyers purchase their own home without a substantial deposit, by way of his First Home Loan Deposit Scheme.
WHAT IS THE FIRST HOME LOAN DEPOSIT SCHEME?
In the past, if you borrowed more than 20% of the purchase price, the banks would charge you lenders mortgage insurance. The First Home Loan Deposit Scheme helps first home buyers to save $10,000 on their Lenders Mortgage Insurance, enabling them to purchase a house with a deposit as low as 5%. This is a massive reduction from the 20% deposit that banks usually require. With this scheme, you can bypass the bank's lenders mortgage insurance and borrow as much as 95% of the purchase price, which is a blessing to first home buyers who had trouble saving for a house deposit.
WHEN WILL THE FIRST HOME LOAN DEPOSIT SCHEME START?
The First Home Loan Deposit Scheme will start on 1 January next year. So if you're a first home buyer wanting to purchase your first home within the next 6-12 months, but can't seem to save up the required 20% deposit, owning your own home can now be on the cards for you.
WHO CAN APPLY FOR THE FIRST HOME LOAN DEPOSIT SCHEME?
Individuals earning up to $125,000 per year, or couples earning a combined $200,000 per annum, who haven't purchased a home before, can apply for the scheme. Support will be targeted to entry level properties only. The value of home that can be purchased will be determined by the area that you choose to purchase in.
Visit First Home Loan Deposit Scheme for more information on how to apply.
If you would like some more information about buying your first home, please contact me for more information, or have a look through the properties that I currently have for sale.
Kelly Pack is a Real Estate Agent in Tarragindi who gives her time to the community and helps people sell, buy and lease their homes.