Dreaming of buying your first home in Australia? Have you saved up for that hefty down payment? We understand that it can be challenging, so here’s the solution. The Australian government has introduced a lifeline for first-time homebuyers- it is the First Home Loan Deposit Scheme (FHLDS). This FHLDS scheme aims to make homeownership more convenient for people by helping them secure their dream home with a lower deposit. That’s great, right?
The Latest numbers have indicated that there are still 25,000 spots remaining for this financial year of the original 35,000 spots. Furthermore, the Westpac Group has been added to the Panel of acceptable lenders. Now, let us clear the fundamentals for you!
First Home Loan Deposit Scheme: Details
The First Home Loan Deposit Scheme (FHLDS) is a government endeavour created to help Australia’s first-home buyers overcome one of the major hurdles on their homeownership journey, i.e. the 20% deposit. When you usually buy a home, you should have a minimum of 20% of the property’s value as a deposit to avoid costly Lenders Mortgage Insurance (LMI). However, with the FHLDS scheme, you can get your first home with a much lower deposit. Let us mention what this scheme brings for you!
Advantages of the FHLDS
- Lower Deposit Requirement: With the scheme FHLDS, you can buy your first home with a deposit as low as 5%, making it much more achievable for many first-time buyers.
- No Lenders Mortgage Insurance: This helps you to avoid LMI which can save a lot of money for you.
- Faster Path to Homeownership: The scheme helps you to fasten your journey to homeownership. It helps in escaping the cycle of renting and building equity in your property sooner.
- Choice of Lenders: With the FHLDS, you have the privilege to pick from a range of partaking lenders. It will be easier for you to find a home loan that fits your requirements.
Do you qualify for the FHLDS?
Make sure that you meet the essential requirements for the FHLDS:
1. Citizenship: First of all, you should be an Australian citizen, at least 18 years old, and should have a valid Tax File Number.
2. First-Time Buyer: Also, this scheme is exclusively for those who are first-time home buyers. What this means is that you must not own a property in Australia.
3. Income Threshold: There are some income restrictions to qualify for this FHLDS. These limitations can vary depending on your location, so we recommend you check the criteria as per your place.
4. Property Price Cap: Remember that the scheme is available for properties within a typical price range, which also ranges by location. You need to make sure that your preferred property falls within these limits.
5. Owner-Occupied: You should be planning to live in the property you are purchasing, it should be considered as your primary place of residence.
6. Loan Structure: Take note that the FHLDS is available for principal and interest home loans with a loan term of 30 years (or less).
7. Not an Investment Property: The property you are going to purchase under this scheme must not be used as an investment or a vacation home.
Important note: The First Home Loan Deposit Scheme has a limited number of places available every financial year. Thus, we advise you to be prepared and submit your application soon when the scheme opens.
To Sum up!
The First Home Loan Deposit Scheme in Australia is a great opportunity for all first-time homebuyers to purchase the property with a smaller deposit and without the obligation of Lenders’ Mortgage Insurance. Just make sure that you meet the requirements, this scheme can open the door to homeownership and turn your dream home into a reality.
Be sure to stay updated about the scheme’s status and any changes in eligibility criteria to make the most of this government-backed initiative. Remember, Divitis Finance is here to guide you along the way.