More Australians (and permanent residents!) will soon be eligible for a leg up into the property market under an expanded Home Guarantee Scheme. Today we’ll run you through all the upcoming changes to the low deposit, no lenders mortgage insurance scheme.
Officially unveiled as part of the 2023 federal budget, the expanded Home Guarantee Scheme will have broader eligibility criteria from 1 July 2023.
So if you’re a single parent or guardian, first home buyer, haven’t owned property for a decade, permanent resident, or looking to buy a home with your friend or sibling – be sure to read on to find out if you’re eligible.
What is the Home Guarantee Scheme?
Getting a deposit together can be a massive hurdle when buying a home.
And if your deposit is lower than 20%, you can get stung with lenders mortgage insurance (LMI), which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.
But through the NHFIC, the federal government has three low deposit, no LMI schemes.
Which means if you’re eligible, you won’t need to wait until you’ve reached the standard 20% deposit.
The First Home Guarantee and Regional First Home Buyer Guarantee support eligible buyers to purchase a home with a low 5% deposit and no LMI.
And the Family Home Guarantee assists eligible single parents to buy a home with a deposit of just 2% and no LMI.
Access to these schemes can, on average, bring forward the home-buying process by five years!
It’s worth noting there is an eligibility criteria, which covers property types, locations and prices.
But an experienced broker (that’s us!) will be across all the ins and outs to help you work out if you qualify.
What are the upcoming changes?
Good news if you are among the increasing number of Australians joining with friends, siblings, and other family members to buy a home.
Come 1 July 2023, you may be eligible to lodge a joint application under the First Home Guarantee and Regional First Home Buyer Guarantee; previously you could only apply as an individual or married/de facto couple.
Meanwhile, the Family Home Guarantee is set to expand to include single legal guardians, such as an aunt, uncle or grandparent. Previously it was only for eligible single natural or adoptive parents.
All three schemes will expand to eligible borrowers who are Australian permanent residents, in addition to citizens.
And all three guarantees will include eligible borrowers who haven’t owned a property in Australia in the last ten years.
What you need to know
The Home Guarantee Scheme can be a great way to fast-track getting into the property market.
But you’ll have to get in quick because places are strictly limited.
That includes 35,000 places per financial year across the First Home Guarantee, 10,000 places per financial year under the Regional First Home Buyer Guarantee, and 5,000 places per financial year under the Family Home Guarantee.
Also, not all lenders are involved with the scheme. But we can help you to identify and compare participating lenders.
So give us a call today to get the ball rolling.
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