What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme is a federal government initiative introduced at the start of 2020. It was introduced to help enable First Home Buyers in securing their first ever home. Ordinarily, a 20% deposit that is based on the purchase price is required in order to buy a property. However, you can utilise a deposit that is lower than the 20%; however this would attract Lender’s Mortgage Insurance (LMI), which can thousands of dollars. Under the First Home Loan Deposit Scheme, First Home Buyers are now able to purchase their first home (cannot be an investment property) for a deposit as low as just 5%. The Australian Government has reintroduced this scheme with participating banks, and will act as a ‘guarantor’ for the remaining 15% of the deposit that would be required.
Applying for the First Home Loan Deposit Scheme
An application process is required to determine eligibility for the First Home Loan Deposit Scheme. In order to apply, you will need to complete the application directly with the participating lender; and therefore direct applications to the Australian Government are not necessary. Consideration on whether to apply as a ‘single’ or a ‘couple’ should be made, as there is different eligibility criteria for either option. It’s important to make sure you understand how the process works, as you can only change your application by only withdrawing the original one submitted – therefore giving up your place in the queue.
Thinking of purchasing your home soon and want to apply for this scheme? Contact us today.
There are a number of criteria points that are used to determine your eligibility for the First Home Loan Deposit Scheme
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