First Home Buyers Update
In our First Home Buyers Update this month we are pleased to report that there’s plenty happening in the property market that should provide some positive incentives.
The first is the announcement of the First Home Loan Deposit Scheme.
Generally speaking most banks and lending institutions require 20% of the property value as a deposit for a home loan, first home buyers or not. However, they also let you borrow more than 80% of the value but this will require your lender to take out Lenders Mortgage Insurance# and the cost can be required up front or added to the overall term of the home loan. It can add in excess of $10,000.
For a lot of people saving 20% isn’t easy for various reasons so if you opt to go down the Lenders Mortgage Insurance route then a 5% deposit can get you started. The First Home Loan Deposit Scheme is going to help with this by guaranteeing the additional 15% deposit for the life of the loan thus removing the need for the lender’s mortgage insurance.
Here’s some facts:
- Starts 1 January 2020
- Open to first 10,000 applicants
- Eligible First Home Buyers only
- Eligibility criteria#*
First Home Super Saver Scheme (FHSS)
This scheme allows you to save for your first home – either to purchase a new home or to build a home – inside your Superannuation Fund with the understanding that the concessional tax treatment of superannuation will help you save faster.
How does it work? You make voluntary contributions from before-tax earnings into your superannuation fund and when you have enough saved you can apply to release these contributions as payment towards a deposit on your first home. You can apply to have a maximum of $15,000 per financial year up to a maximum of $30,000 across all years. You will also receive an amount of earnings related to those contributions.
Here’s some facts:
- Became effective in 2017-2018 budget
- From $15,000 to $30,000 voluntary contributions become available
- You must get approval for the release of the FHSS funds prior to signing a contract to buy or build
- Qualifing criteria applies
Useful links and information:
#Lenders Morgage Insurance – what is it? Find out more information at the ASIC website or speak to your preferred lending institution.
$#First Home Loan Deposit Scheme – find out details here.
First Home Super Saver Scheme – find out details here.
Disclaimer: Any information or figures provided in this news update are for information purposes only and any calculations are examples and estimates only. Links to relative websites are provided so you are able to get detailed information. We highly recommend you consult your financial advisor or lending institution for details on your person circumstances.
