More First Home Buyer Scheme Spots Now Available

First Home Owner Scheme Update


Lenders Mortgage Insurance is an insurance that banks take out, to protect themselves when a customer has a deposit less than 20% of the purchase price. The customer must pay this insurance to the bank. The cost can be up to 5% of the purchase price, which is a large additional expense that property buyers need to have.


As of 1 July 2022, the Government has guaranteed 35000 applications for first home buyers, known as the First Home Buyer Guarantee Scheme (FHBG), to waive the LMI fee. This could mean that first home buyers can enter the property market more quickly, as they need to save less money to get started.


The criteria to qualify for the FHBG are:

· You must have 5% of the deposit saved in your bank account – it must be in a bank account in your name. Those funds must be in your account for at least 3 months before you apply for the loan.

· Your taxable income for the 21/22 cannot be more than $125,000 as a single, or $200,000 as a couple.

· An Australian citizen

· First home buyers who have never previously owned, or had an interest in a property in Australia


There are also price caps:

· In NSW, the maximum purchase price is $900,000 for Sydney metropolitan, and the Regional Centres of Newcastle, Lake Macquarie and Illawarra. This is a $100,000 increase on last year’s limit for this Scheme.

· For the remainder of NSW, the maximum purchase price is $750,000, which is $150,000 higher than last year.

· For other states, please click on the link https://www.nhfic.gov.au/what-we-do/property-price-caps/


Applications are open now with eligible banks.


To purchase a property under this Scheme, you must have your 21/22 Notice of Assessment available. If you apply for a position prior to the end of August, you will be granted a Scheme position without having to provide this, however you must have the Notice of Assessment before you can make an offer to purchase a property.


Single Parent Home Owner Scheme


The single parent Scheme is also releasing more spots. The criteria for the Family Home Guarantee (FHG) Scheme are

as follows:

· Have at least one dependent child

· Be single – noting that you must be divorced, not separated, to be eligible

· Require evidence of 2% savings, held in your bank account for at least 3 months

· The maximum purchase price is as per the FHBG above

· Be earning no more than $125,000 per year


You do not need to be a first home buyer to qualify, however you cannot currently own a property.


For both Schemes, you are required to qualify for a loan based on their borrowing calculators, and their policies on employment, acceptable income, and credit. Not all banks are offering places for this Scheme, and each bank’s lending criteria and borrowing limits differ.


If you have any questions regarding the FHBG or the FHG, please email me on jennifer@jblhomeloans.com.au or call on 0414670151.

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