The federal government has announced a scheme to assist first home buyers meet lender’s loan deposits. The First Home Loan Deposit Scheme (FHLDS) will guarantee mortgages for first home buyers who have only saved a 5% deposit, effectively helping them buy sooner without paying lenders mortgage insurance premiums.
Here’s how it works:
- If you’ve saved 5% of the purchase price of your property the government will guarantee the remaining 15% of the deposit.
- You will still need to borrow 95%.
- Eligible first home buyers can’t be earning more than $125,000 a year ($200,000 for couples).
- Access to the scheme is limited to 10,000 borrowers.
- The value of eligible homes under the scheme will vary by region. For Queensland, cities and regional centres are capped at $475,000, other communities at $400,000.
- The scheme starts on 1 January 2020.
- Information regarding the application process is yet to be announced.
What this essentially means is, if you are looking break into the property market you won’t have to wait until you have saved up a deposit to do so. This along with the $15,000 first home owner’s grand from the Queensland Government makes this the perfect time to invest in a new home.
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