First-time homebuyer? Congratulations! Not only is owning your first home an exciting milestone, but it also comes with some significant financial benefits.
As the real estate market is constantly changing, there are excellent chances for first-time homebuyers seeking loan to buy their ideal residence and enter the real estate market for the first time.
If you’re considering purchasing your first home, you might be eligible for financial aid through government initiatives that assist first-time homebuyers (FHBs). You will encounter extremely varied conditions and obtain quite various sums depending on where you purchase. This useful resource can help you understand how to go one step closer to home ownership and your lender can help you compare costs and any grants or concessions.
Buying your first home is a major investment, but it’s also one that can pay off in a big way thanks to the many benefits and incentives that come with being a first-time buyer.
Let’s explore everything you need to know about Australian first home buyer schemes, including tips and tricks to ensure you switch to the best option for your needs and budget.
Saving together the money necessary for a down payment on a mortgage is the first challenge in purchasing a new house. Most mortgage companies demand payment of a modest portion of the purchase price before approving any mortgage loans.
While saving up tens of thousands of dollars may be challenging, the ability to manage your money is a solid indication that you’ll be able to manage any unforeseen mortgage payments and other housing-related obligations with ease.
Although Land tax, home and contents insurance, and furnishing are likely to account for a sizeable portion of your nest egg, it is also crucial to take into consideration several additional expenses when planning your savings.
Keeping with money, you might be setting yourself up for future financial difficulties if you receive a lump sum of cash and decide to spend it all on a home.
The total cost of purchasing a home is not the purchase price of the property. Depending on the amount of finance you need, you’ll need a reliable source of income to cover any future loan payments. Also, over the time, all homes will need upkeep and repairs.
Without a consistent source of income, any big repairs could result in a sizable financial burden, so it’s better to make sure you have enough money coming in each month to pay any unforeseen expenses.
If you’re a first-time home buyer, we have the expertise to guide you through the process and ensure a successful outcome. With a focus on transparency, integrity, and exceptional service, we’re dedicated to making your home-buying experience a positive one.
If you’re thinking about purchasing a property with a partner or family member who isn’t a first-time buyer, here is some conditions which you’ll need to weigh the potential cost savings against the added complexity of managing the purchase process:
· The FHBAS applies when 50% or more of buyers are eligible.
· If you’re buying a home with others who aren’t eligible, you can still apply for the scheme if you and any other eligible buyers are purchasing at least half of the property. This is called a shared equity arrangement.
· Shared equity doesn’t apply if your spouse is one of the ineligible buyers.
Suppose you want to buy a property under FHBAS with your brother who is not an Australian citizen or a permanent resident hence making him ineligible for this scheme, you can still apply as long as you own 50% or more of the property to be purchased.
If you’re a first home buyer, you may be entitled to a concessional rate of transfer duty or even an exemption from paying it altogether under the First Home Buyers Assistance scheme (FHBAS).The FHBAS aims to support first-time homebuyers in achieving their dream of owning their own home while also stimulating economic activity. The scheme provides more substantial support to those who are building a new home*, existing homes, and vacant land whether it be a new apartment or house.
Note- *A new home is a home that has not been previously occupied or sold as a place of residence and includes a substantially renovated home and a home built to replace demolished premises.
To qualify for the FHBAS
· The contract date must be on or after 1 July 2017 and must be for the whole property Note: To be eligible for the increased transfer (stamp) duty threshold available between 1 August 2020 and 31 July 2021, the contract must be dated on or after 1 August 2020 and on or before 31 July 2021.
· You must be an individual, (not a company or trust)
· You must be over 18.
· You, and your spouse or partner, must never have owned or co-owned residential property in Australia.
· You, and your spouse or partner, must never have received an exemption or concession under this scheme.
· At least one of the first home buyers must be an Australian citizen or permanent resident.
You or one of the other first home buyers must
· Move into the new home within 12 months after buying the property and
· Live there for at least six continuous months.
If you’re a member of the Australian Defence Force when buying your first home and you and everyone you’re buying with is on the NSW electoral roll, you won’t have to meet these living requirements.
If your circumstances change and you won’t be able to move into the house within 12 months or you can’t live there for six continuous months, you are no longer eligible for the scheme.
You must let us know straight away to arrange the correct duty to be paid. Otherwise, you’ll face the possibility of penalties or fines.
There are substantial penalties for providing false or misleading information when applying for the FHBAS. We regularly check applications for inaccuracies and compare your information to data from other government agencies and businesses.
There are alternatives to help you enter the real estate market if you are ineligible for the programme. First Homeowner Grants are financial aid programmes created by each state and territory to provide a one-time lump sum payment to assist you in purchasing your first house. However, keep in mind that every state has various requirements, limitations, and borrowing limits. Read more here about The First Home Loan Deposit Scheme (FHLDS), First Homeowner Grant and first home buyer choice scheme.
The FHLDS is a government guarantee that enables qualified first-time buyers on low and moderate incomes to buy their first house with as little as a 5% down payment. The First Home Loan Deposit Scheme (FHLDS) gives first-time buyers the chance to buy a property with a deposit of as little as 5% while avoiding lenders’ mortgage insurance (LMI). For the borrower to be exempt from LMI, most of banks and lenders demand a minimum deposit of 20% of the property’s worth. The programme enables first-time homebuyers who are unable to meet this requirement to obtain a loan if they have saved at least 5% of the price of the home they are purchasing. Borrowers won’t be required to pay LMI because the government will underwrite the loan.
You must demonstrate your eligibility and apply for the programme through one of the program’s authorized agents or one of the program’s participating lenders. If you are permitted, you can then apply for a mortgage with a lender, and the government will guarantee the loan. This will make it
simpler to acquire a loan without having saved for a 20% deposit, though your lender will still conduct their standard checks on your financial condition.
Ø First homeowner grant (FHOG) is a one-time payment made to first-time homebuyers to assist with the cost of purchasing a starter home or undeveloped land on which to build a home. There are conditions linked to the Grant, even though it is not required to be repaid and is not taxable.
Ø The First Homeowner Grant is funded by state governments; thus, each state and territory has a different amount available. Depending on where you purchase, you will receive a specific amount.
Ø Depending on your state or territory, restrictions can apply. The First Homeowner Grant is only available if you purchase or construct a new house in various states. If you spend more than a particular amount on your first home, you could not be eligible for the FHOG in some states.
First Home Buyer Choice currently gives first-time buyers of homes up to $1.5 million the option to forego transfer duty in favour of a yearly land tax. Only first-time homebuyers who elect to pay the property tax will be responsible for paying it; future buyers of a property will not be subject to it. The option of either Stamp duty or a yearly Land tax is also available to first-time homebuyers who purchase vacant land with an estimated value of no more than $800,000 on which they intend to construct a residence.
It’s worth doing some through study to determine if now is the right moment to buy before becoming involved in the property market. While you may be eager to buy a home, it might be more advantageous to rent for a little longer because the property market is a turbulent environment where prices and values are always fluctuating.
Also, it’s crucial to investigate the top regions to purchase your first house when the market is strong. While certain places could be more suited for your needs, some suburbs offer a greater potential for growth than others.
Ready to take the next step towards your dream home? Contact Nfinity Financials today and let us help you secure the best possible mortgage for your needs. With our team of experienced brokers and our commitment to finding the right solution for you, you can trust us to make the home-buying process a smooth and stress-free experience. Visit our website at www.nfinityfinancials.com or call us at 1300 GET HOME LOAN to get started. Your dream home is within reach – let us help you make it a reality!