Government Support for First Home Buyers
There are a lot of ways that can provide assistance in funding the purchase of your home. Here is an outline of some of the options that you may consider:
1. Concessions on Stamp Duty
There are specific territory and state governments that provide added incentives to people who buy homes for the first time. Some of these involve concessions in stamp duty. Oftentimes, it would be worth it to research on what they are offering in the area where you are planning to buy.
2. Grant for First Home Owner
The one-off grant is offered by state governments to first home owners that are capable of satisfying everything in their criteria for eligibility. In case you feel unsure regarding your eligibility, get in touch with the state revenue office near you and make sure to apply ahead of time.
3. Super Saver Scheme for First Home Buyers
First home buyers who are eligible may have their voluntary super contributions withdrawn. They should have made this since the first day of July 2017 so it can be placed toward their home deposit. Because of the FHSSS or First Home Super Saver Scheme, people who buy homes for the first time can voluntarily contribute to their super and withdraw certain limits of the amounts to add to their associated earnings from their super fund to provide assistance with a deposit on the first home they get.
In case they become eligible, the highest contribution amount that you may withdraw under the scheme is $60 thousand for couples and $30 thousand for individuals.
In case you are still quite far from buying your first home, we recommend that you make super contributions voluntarily instead of having them saved into your bank account so that you can eventually access them under this scheme. It could help in producing benefits on tax that can assist you to immediately reach your initial goal in deposit.
4. First Home Loan Deposit Scheme (FHLDS)
The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.
Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (lenders criteria also apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan. You could save thousands of dollar if you are eligible to this scheme.
HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.
HomeBuilder will complement existing State and Territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Allow your finances to be in order so you can be ready to go
With regards to the approval time for home loans, it may vary. Because of this, we recommend to have your loan pre-approved first so you will become aware of the amount that you may borrow. Aside from that, you may also need to have a formal approval which is close to purchase and ready your deposit if you don't want to miss out. You may need to have your back cheque or checque book ready to go in case you will go to an auction to purchase your first home.
The lender may also advise you if it is required to have lender's mortgage insurance as a part of the process.
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