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  • Writer's pictureColin Green

Home Loans For First Time Buyers: What Support Is Available?

Updated: Dec 4, 2023

Buying a home is a great goal for many people and for first-time buyers there are a few systems in place that can make the process easier. Understanding what grants and schemes are available is the first step and can mean the difference between being able to afford to get on the housing ladder and not. So what support is available on home loans for first time buyers?

First Home Guarantee Scheme

One of the most significant hurdles that face a new home buyer is saving enough money to place a modest deposit against the value of a home. For most, the ideal number is to secure a 20% deposit to keep lenders from feeling nervous. A low deposit often triggers extra expenses in lenders' mortgage insurance charges (LMI). A new home buyer that only has, for example, 5% of the capital needed to invest in a property may find the struggle all too real.

first home buyers celebrating moving into their new home

That's where the First Home Guarantee Scheme comes in. Eligible Australian citizens with some savings for a home can apply to this scheme in hopes that the Australian government may underwrite their loan, shoring up the gap between their savings amount and the amount needed to pay 20% towards their mortgage loan. The risk of being charged LMI is negated in this case, and acquiring a new home is expedited considerably.

Now, you might think, what's the catch if the government guarantees my loan? Rest assured: the National Housing Finance and Investment Corporation (NHFIC) won't demand repayment for their involvement in securing your loan. The NHFIC expects buyers in this circumstance to reside where they have purchased; the guaranteed portion of their loan may no longer be so if they move out without selling or having covered that portion by paying down the loan.

First Home Owners Grant

Where the First Home Guarantee Scheme is provided nationally, the First Home Owners Grant is offered at a state level in Queensland. Each state has its scheme in place; in Queensland, eligible applicants can receive a grant of $15,000 to purchase their first home. While the First Home Guarantee Scheme provides finance towards a deposit, the First Home Owners Grant may not be paid out at the beginning of a purchase period but in various phases depending on the type of purchase. The grant is only available to Australian citizens and permanent residents who have not previously purchased a property. Those married to an Australian who already owns a home are not eligible. It is expected that recipients of the grant move into their homes within one year of the completed transaction and remain there for six months.

The Federal Government's Help To Buy Scheme is also due to launch in 2024 so it's worth keeping up to date with all the options available to you. We will aim to keep you updated on all the latest schemes and opportunities as we get new information.

Getting the support of a trusted local mortgage broker can make all the difference in making your first home dreams a reality. CJG Finance can help interested first time buyers assess their situation to determine if this is an advisable approach for them. We can help you assess your eligibility and understand what you are required to do. And then we can help you identify the best home loan options for your circumstances and start making your dreams of becoming a homeowner a reality!

Give Colin at CJG Finance a call today on 0402 413 917 or drop us a note today to get the process started.


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