New financial year brings even more federal government support for those buying their first home.
The Australian Federal Government has ushered in an unprecedented level of support for first home buyers this new financial year. On July 1, the Federal Government opened up 40,000 new places under its First Home Guarantee Scheme. The newly appointed labour government has also announced a Help to Buy shared equity scheme, where it will help eligible first home buyers by contributing up to 40 per cent towards the purchase of a new home.
Administered by the Federal Government’s National Housing Finance and Investment Corporation (NHFIC), the New Homes Guarantee Scheme is open to individuals earning up to $125,000 a year or couples earning up to $200,000 who are looking to purchase their first home. Under the scheme, first home buyers can apply for a loan through one of the scheme’s 32 lenders for the purchase of a property in Sydney worth up to $900,000.
Home buyers usually are required to pay lenders’ mortgage insurance (LMI) if they purchase a property with a deposit of less than 20 per cent. But under the scheme, the NHFIC guarantees up to 15 per cent of the value of the property, meaning approved buyers only need to pay a 5 per cent deposit and avoid paying costly LMI insurance.
The number of places under the scheme has now been expanded from 10,000 to 35,000 a year. An additional 5,000 places are open to single parents who will only be required to pay a 2 per cent deposit towards the purchase of a property.
The Federal Government says its new Help to Buy scheme will see eligible first home buyers in Sydney save up to $380,000 on the purchase of a newly built home or apartment. Open to 10,000 applicants a year, the scheme will see the Federal Government contribute 40 per cent to the purchase of a new home or 30 per cent to an existing home.
Successful applicants will only require a 2 per cent deposit towards the purchase of a property worth up to $950,000 in Sydney, again removing the need of costly LMI insurance. To be eligible for the scheme, applicants must earn less than $90,000 a year or $120,000 for couples. Homebuyers are not required to pay any costs related to Federal Government’s share in their property, significantly reducing the costs of their mortgage.
And don’t forget the First Home Super Saver Scheme - this enables first home buyers to build a home deposit inside their superannuation accounts by up to $15,000 a year or $30,000 in total. The First Home Super Saver Scheme effectively allows first home buyers to build a home deposit quicker given their extra super contributions are taxed at the concessional rate of 15 per cent. Buyers can then withdraw the savings when they are ready to buy their first property. The key requirement is that applicants must live in their home for at least 6 months in the first year after purchase or construction.
So if you are near being able to realise your first home dream, check out Cramer’s incredible properties below:
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