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As a first home buyer, you have options for government assistance available to you. Learn about how you can access these grants and other benefits.
Or, call us now on 07 3293 9100
Managing Director
Government Grants and Family Guarantors are two of the ways that buying your first home can be made easier.
Buying a home is the biggest financial decision you will ever make. To purchase a home, you will most likely need a loan.
These loans come with costs and risks. However, government grants and family guarantors can help. Read the below information to find out more!
And if you are looking for a first home to buy, see all the high-quality property for sale at Affinity.
The First Home Owners Grant (FHOG) commenced on 01 July 2000. The First Home Owners Grant is in place to assist with offsetting the GST cost which applies to homeownership.
In simple terms, the First Home Owners Grant is a state government initiative to help first homeowners buy their new first home sooner. It is a one-off grant that is payable to first home owners that meet the ‘required’ criteria. This means that qualification rules, amounts, supporting information, and payment processes can differ from State to State.
The Office of State Revenue (also known as the State Revenue Office) pays the grant. However, if you meet the standard qualifying criteria then your credit provider can process it, as an agent. You will receive the grant at settlement or first drawdown for construction finance.
The processing procedure for the grant differs from institution to institution. For example, some institutions may require the original grant application others may work on an electronic copy.
It is important therefore that you understand how the grant works in the State of purchase and what the credit providers’ requirements are. Failure to understand these things could delay the grant payment and settlement.
The rules do change from time to time and if so usually at the beginning of the new financial year. To avoid being caught out by these changes it is good practice to register for updates and review their websites at the start of each financial year.
There are many types of guarantor loan options but the most common is that of a family guarantor loan. This is when the guarantor is directly related to the borrowers. Grandparents, siblings and other family members can be considered on a case by case basis but is not as preferred as a direct parent.
A family guarantor loan has 2 main benefits for a borrower or applicant:
The new loan is secured by both the new property being purchased as well as the property owned by the guarantor. For the majority of guarantor loans we ask the lender to limit the guarantee secured on the guarantor’s property. This means that they are not liable for the entire amount of the loan, only a portion of it, usually only the 20% depending on the bank and situation.
On paper, the guarantor is ultimately liable for your home loan should you run into trouble. If you are having problems making the repayments on your home loan, seek assistance from the bank or your broker. Remember your house will be the first one where action is sought before the guarantor is contacted.
One of the greatest fears is that the bank will sell the guarantors home to cover any outstanding debt should you default. In reality, the banks will try everything to solve the problem before taking this drastic action.
Overall a family guarantee can be a great choice for families who are able to help out. It can be cost effective and easy to set up. However, its not for everyone so always ensure you seek help to decide what option suits you best.
In 2022, the First Home Guarantee Scheme was introduced by the federal government to succeed the First Home Loan Deposit Scheme. Under this scheme, a first-home buyer can purchase a home with a deposit as low as 5%, provided it fits within a certain price range.
The price cap depends on which part of the country you are in. In Queensland’s capital city and regional centres, the cap on the Scheme is $700,000. In regional areas, the price cap is $550,000. To see the price cap for properties in other states, click here.
The scheme was luanched on the 1st of July, 2022 and will conclude on the 30th of June, 2023. There are only 35,000 places in the Scheme, so you should act fast and apply.
You can check your eligability online through the government's website. Check youe eligability for the First Home Gaurantee Scheme here
Buying your first home can be stressful, but an experienced property manager like Affinity can make it easy for you.
Or, call us now on 07 3293 9100
