Published Tue 30 Mar 2021

Are you a first homebuyer feeling the FOMO now that the Homebuilder Scheme has ended and think you have missed your opportunity to enter the housing market? Think again!

Post HomeBuilder Incentives For First Home Buyers There is still an amazing amount of incentives available for first home buyers to help you on your first home buying journey at Warralily.
First Home Buyer Grant and Low Deposit Scheme

At Warralily, First Home buyers are entitled to a $20,000 First Home Buyer Grant as Geelong is part of regional Victoria.  The First Home Buyers Grant is available for first homebuyers who sign a contract before 30 June 2021 and of course meet some eligibility requirements.
  • The total value of the property must not exceed $750,000.
  • You and your partner must not have previously purchased a home in Australia.
  • One of the applicants must be a permanent Australian resident. You must live in the home for a period of 12months.
  • You are 18 or over.
  • Each applicant has entered into a contract for the purchase of a new home or signed a contract to build a home on or after 1 July 2017.
In 2020, the Australian Government introduced a First Home Loan Deposit Scheme (FHLDS) to support eligible first home buyers purchase a home sooner. Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance,  which on a home valued at $550,000 can be as high as $23,000!

Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan, so basically the government is being your guarantor. 10,000 FHLDS places for the 2020-21 financial year are available specifically for eligible first home buyers building or purchasing new homes. There is a catch in that you do have to go with an approved lender however the are 27 lenders for you to choose from. You also need to be able to service the loan under that lenders borrowing criteria.
  • The total value of the property must not exceed $850,000 (for new homes only).
  • You and your partner must not have previously purchased a home in Australia.
  • You must be an Australian citizen; the scheme is not available to permanent residents.
  • You haven’t purchased a home before.
  • You are 18 or over.
  • You meet one of the following two income caps: $125,000 per annum for an individual applicant based on your 2018-19 taxable income or later; or $200,000 per annum for a couple based on both 2018-19 taxable income or later.
  • You have at least 5% deposit made up of genuine savings.
All applications for the First Home Loan Deposit Scheme need to be made directly with  one of the Scheme’s participating lenders  (or their authorised representatives, i.e. a mortgage broker). If you don’t want to borrow from one of the schemes lenders you may still be eligible for a Lenders Mortgage Insurance discount with another lender.

Lenders Mortgage Insurance Discounts

Nobody wants to pay Lenders Mortgage Insurance (LMI), but not everybody has a 20% deposit and for some first home buyers to First Home Loan Deposit Scheme may not be for you.  You may or may not be aware but Lenders Mortgage Insurance is an insurance that protects the banks or lenders when the borrower’s deposit is less than 20% of the property’s purchase price.  

While this is an additional cost to your loan it does allow first home buyers with a lower deposit buy their first home sooner. Generally, you are not required to pay LMI upfront. It is added to your loan. The LMI fee payable depends on several variables, including the loan amount and the deposit amount, so it can vary significantly.
Luckily, some lenders offer significant LMI discounts for eligible first home buyers reducing the LMI fee by as much as 25%-33%. This could save you thousands of dollars, while getting your into your first home sooner.
It’s a good idea to double check the lender’s loan-to-value ratio (LVR) requirements before deciding whether to apply for an LMI discount offer. Speak to your broker or lender about the terms and conditions and make sure you understand them before proceeding.
Stamp Duty Savings.

Buying your first home? You may be eligible for a stamp duty exception. This means you pay no stamp duty which will save you thousands (up to $30,000) on your new home!    
Of course, there are eligibility requirements for the exemption.
  • You enter into a contract of sale to buy your first home after 1 July 2017 and before 30 th  June 2021.
  • Your home has the dutiable value of $600,000 or less.
  • You fulfil the First Homebuyer Eligibility criteria
  • At Least on of the purchasers are an Australian Citizen
  • You must live in your new home for 12months from settlement.
  • The exemption is only available to you once.
To find out how much are saving in Stamp Duty by purchasing before June 30 th ,  the State Revenue Office (SRO) have this handy calculator  tool
For more information on purchasing your first home at Warralily contact Anna Kichakov on 1300 458 193 or register here .

*All effort has been made to provide accurate information; however, readers are encouraged to make their own enquiries and conduct their own research in relation to the grants and schemes featured above to determine their eligibility. For more information on the First Home Buyer Grant and Stamp Duty exceptions visit  www.sro.vic.gov.au  For the First Home Buyer Low Deposit Scheme visit  https://www.nhfic.gov.au/what-we-do/fhlds/  or your chosen lender. For LMI Discounts available and lenders who offer LMI discounts speak to your broker or preferred lender.

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