No matter who wins the election on Saturday the Federal Government will provide 10,000 First Home Buyers (FHB) with assistance to secure a deposit for their home loans starting 1 January 2020.
The First Home Loan Deposit Scheme (FHLDS) is a great idea but it will eventually push the price of house and land packages higher as it stimulates the market and the discounts available in 2019 will start to disappear, therefore 2019 is a great time to buy and enjoy the price rises that are likely to occur from 2020 onwards as FHB buyers get access to the market again.
The demand stimulated by the FHLDS will not be massive – there are just 10,000 loans for all of Australia each year – but it will provide finance to thousands of Victorians each year.
Importantly, the FHLDS is in addition to the Victorian Government’s First Home Owner Grant (FHOG) of $10,000 making home buying uniquely affordable and is also designed to remove the cost of mortgage insurance for buyers that can add thousands to the purchase price.
The First Home Loan Deposit Scheme will be available to first-home buyers who have been able to save a deposit of at least 5% and is expected to cut the time taken to save for a deposit by at least half.
On a typical $500,000 home a purchaser would only need to save $25,000 instead of the $100,000 (20%) deposit required by banks.
The value of homes that can be purchased under the scheme will be determined on a regional basis, reflecting the different property markets.
Essentially the scheme includes guarantees to approved applicants for the additional loan amounts taken out by the first-home buyer to cover the difference between the lower deposit, of 5% and the 20% of the value of the property.
The Federal Government doesn’t give you the $75,000 difference (15%) required for the deposit but guarantees it as part of the loan application.
You will still be required to repay the mortgage cost of the house minus your 5% deposit.
To ensure the money goes to FHB’s there will also be caps on the price of properties that can be bought and it will only be available to individuals earning up to $125,000 a year or couples with incomes up to $200,000.
This scheme will give purchasers greater access to working with smaller banks and non-bank lenders to boost competition.
For further information call Andy on 1300 268 629
www.accoladerockbank.com.au
