There are quite a few updates I thought I would go through. So, on top of things when it comes to buying your first home, some announcements are made in conjunction with the budget, which is due to be announced tonight the 11th of May. The point is they pre-announce these things for the budget and there has been a lot of stuff in the news for first homeowners. So I thought I would get this information out to you as soon as possible.
First off, what I’ve seen on my newsfeed, is the 2% deposit. It’s a good headline grabber, and it certainly got my attention. What this one was about was the 2% deposit available for single parents. So basically, if you’re a single parent, you can get into a 2% deposit in the housing market.
Before I go on, with this site, I’ll put this one in the links because this gives you all the information you need to know. If you think you qualify, I would say this from my previous clients’ experience because it can be quite confusing. So if you get confused, don’t worry, it’s normal. What you should do if you are buying your first home is engage a mortgage broker, because a mortgage broker is then going to know if you can get approved for the loan in the first place.
Then they’re going to be able to figure out which of the schemes that they qualify for. Because of the first home loan deposit scheme, there are probably three different kinds of things you can qualify for depending on what you want to do. There is also the first home owner grant; there is also the first homeowner concession here in Victoria. So full disclosure, I am a mortgage broker, that is what I do. I put together these things for clients so that they can get into their first home at the end of the day.
How a mortgage broker helps you...
A mortgage broker will have all the knowledge and skill to get you to achieve that. So it’s a shortcut. But having said that, check this site out and go over it. And yeah, there’s a lot of information on it. So you definitely won’t be behind if you get on this site. So back to the actual news. First, sorry, for the family home guarantee, that’s new, that’s the new kind of name they’ve got for the single parent one. There’ll be 10,000 spots for that.
Additionally to that news which has been hidden with all the other budget spruiking. is the extension of the existing first home loan at their first home loan deposit scheme. The previous kind of versions of the first home loan deposit scheme, so what I might do is explain to you what, what the actual scheme does because I don’t think a lot of people know what it is. So the first one got bought out Jan, January one last year, so 10,000 spots, and what does is when you get for a home loan, you have to put down a deposit.
What sort of deposit do I need?
Usually, the minimum deposit is 5% of the purchase price of the property. Because your deposit is so small, you have to pay what’s called Lenders Mortgage Insurance, insurance that the lender takes out, which you pay for, that covers the lender if you can’t make payment.
Generally, a cost is three or 4% of the purchase price if you got a 5% deposit. So let’s put some numbers around that if you want to buy at 600 grand, and you’ve got a 5% deposit, which is 30 grand, you will need another three or 4% saved up to get yourself into the housing market.
So you need to save another 18 to 24 grand to get yourself into the market, which is quite a lot of money. And that’s why this game helps out first home buyers. So there are 10,000 spots of that, and they went, and then July one last year, they bought out another 10,000 spots. And then what they decided to do, because of the pandemic to help the economy out, is bringing out another 10,000 spots, but only had them for new properties.
Then theres House & Land
So the idea was that it would help the economy because it employs a whole labor of people to build a house. And so that’s been in place, and that’s still being available. And they’ve announced another 10,000 spots for that come July one this year. What is most exciting about these announcements, which have been hidden, I had to look and find them because they’ve also announced another 10,000 spots for existing homes, which is quite big. In my area of Southeast Melbourne, you can still actually buy a house for under 600 grand. Now, that is the actual cap for this game.
So the maximum price you can pay for a home is 600 grand in this game. So that’s very exciting. Because last year, during a pandemic, quite some first-time owners wanted to take advantage of this game. But of course, we had the pandemic and the lockdowns. And people decided, quite understand that they didn’t want to go ahead and buy a house.
Since then, the 10,000 spots Rania couldn’t access this game because they didn’t have enough savings. So they only had 5%. And they didn’t have the other three or 4% to cover the mortgage insurance. So the exciting thing is, a lot of these guys will be able to get into the market off that 5% deposit. My suggestion is if you want access to it, it is made on the 11th now. We’ve got July one, so to access it, it does take quite a bit of time because you have to organize the actual loan application, which is quite a bit of work that the mortgage broker needs to undertake. We need to figure out which lenders are the best. We need to consider things like particular lenders are taking a couple of months.
That’s right, a couple of months to pre-approve their clients. What that means is, it could be a couple of months before you have access to this game. Now, if a lender operates like that, and all the 10,000 spots are gone within a couple of months, well, it means you don’t have access to this game, even though you are qualified.
What else is out to get you?
There are other things as well with things like that even if they issue you a spot on the scam, you’ve only got 90 days, if it takes them, if it takes the lender two months to approve you, then you’ve got real problems only having a month to buy the house and settle it.
And that’s why I say go to a mortgage broker because they’re going to understand the required timings. They’re going to understand the lenders where you’re most likely to get approved, and they got to pull it all together for you.
So that’s what I would recommend, using a broker in your local city because they will know the local laws. Having said that, I’m happy for people to get in contact. For assistance. I’m in Melbourne, so anyone that’s in Melbourne, feel free to reach out.
