Need a Mortgage Broker
for the First Home Buyers Grant?
The First Home Loan Deposit Scheme (FHLDS) is a federal programme that assists first-time homebuyers in purchasing or building a new home with a reduced deposit and without having to pay Lenders Mortgage Insurance (LMI). The FHLDS New Home Guarantee is another name for the Scheme.
Traditionally, a deposit of 20% of the property value will be required to avoid paying LMI. For the FHLDS Scheme, you just need a 5% deposit plus the purchasing cost. This Scheme has the power to save first-time homebuyers with modest deposits – less than 20% – and tens of thousands of dollars in LMI payments.
First-time homeowners may use this Scheme in conjunction with other state and federal incentives, such as the HomeBuilder programme and get stamp duty concessions/exemptions on their purchase.
Each state has its own specific policies on the government grants and schemes for first home buyers.
Our team at First Choice Mortgage Brokers will assist you with the application to see if you are eligible for your state or territories requirements. Usually, the first homeowners grant application is submitted whilst the loan is proceeding so that the funds are available for settlement of your home loan.
In some cases, the grant can be submitted post-settlement and the funds deposited into your bank account. We will assist you with the application and submit the forms on your behalf; this is part of our ongoing commitment to you.
Remember, there are only a limited number of Scheme places available – 10,000 each year – so it is important to get in as quickly as possible and be mindful. Please call First Choice Mortgage Brokers to discuss your first home buyers grant opportunities and for any assistance in accessing the First Home Buyers Grant application process.
What Properties are Eligible
for the First Home Buyers Grant?
- Newly-constructed dwellings,
- Off-the-plan dwellings,
- House and land packages, and
- Land and a separate contract to build a new home
Am I Eligible for the First Home Buyers Grant?
The following conditions best summarise a person’s eligibility for the First Home Loan Deposit Scheme (FHLDS):
- Citizenship and minimum age requirements: To apply, you must be an Australian resident over 18. If you are applying as a couple, both of you must be citizens. Permanent residents are not permitted acceptance.
- Income requirement: For solo applications, your taxable income must be less than $125,000; for couples, your total income must be less than $200,000.
- Check for prior land ownership: You must have never purchased or had an interest in a property in Australia before.
- Owner-occupier test: Since the Scheme is designed to help first-time homeowners buy a home to move in, investment properties are not permitted. The owner must occupy the land for at least six months.
- Deposit requirement: You must have at least 5% of the property’s worth in genuine savings as a deposit. For example, a $25,000 deposit is required for a $500,000 house. Depending on the lender and the sort of property you’re purchasing, you can need a larger deposit. Please consult with your mortgage broker.
If you cannot meet all of the eligibility requirements, you are not eligible to receive the grant. If you receive the grant and fail to meet the eligibility requirements (for example, not living in the home for a continuous period of at least six months), you need to pay back the grant. Failure to do so can result in prosecution and penalties up to $11,000.
If you require further assistance please do not hesitate to call First Choice home loan brokers Sydney, our expert staff will do everything possible to assist you!
Buying First Home Glossary
Amortisation
This means the act of repaying a loan in regular payments over a period of time.
Assets
Real estate, cash savings, shares and other goodwill items owned by an individual.
Arrears
The amount of unpaid loan repayments.
Application Fees
Fee’s that the lender may charge either on the submission of the loan or at settlement.
Bridging Finance
A short term finance contract that bridges the gap between an individual’s existing property to a new property.
Capped Rate Loan
A loan where the interest rate is capped at a specific amount and not to increase above this benchmark rate.
Certificate of Title
A certification issued from a government body, usually the state’s Lands and Titles office, which has the properties lot and plan number, encumbrances are registered.
Company Title
A type of title which allows a company to own the property, and an individual can buy shares in the company, which allows the individual to occupy the property.
Covenant
Can impose conditions and restrictions on a property.
Cross Collateralisation
A method used by lenders to add more security to a loan transaction. It is accomplished by the lender placing a lien on another property in addition to the property that is the subject of the loan. Having more collateral reduces their position of risk.
Equity
The difference between your loan amount and your property value, for example – if your home is worth $500,000 and your home loan is $300,000, then your equity is $200,000.
Fixed Interest
An interest rate that is fixed at a specific amount.
Loan to Value Ratio
The ratio between the loan amount and the valuation of the security.
Mortgagee
The borrower taking a mortgage over the property.
Strata Title
Generally, this type of strata title is relevant to the buildings on the lot, whereas a Torrens type title comprises land and the accompanying buildings.
Speak to a Mortgage Broker
You can make an appointment with a First Choice Mortgage Broker consultants by calling 1800 111 455.