First Home Buyers Finance Breakdown

| 4 February, 2020 | 3

The who’s, the what’s and the how’s of the First Home Buyer

We’ve all started out as a first home buyer when we think about getting into a new home, but many of us have no idea where to begin. Especially with all these different questions popping up, like:

Do I want to build? Where am I going to live? Have I got enough savings? Am I eligible for any government or organisation help? How does it all work and what is the nitty gritty?

So for many first home buyers out there, these questions can be very confusing and put a damper on the whole experience. That’s why Move Homes has put together a finance breakdown.

First Home Owners Grant (FHOG)

The FHOG is a Government funded one-off payment of $10,000 to help assist first home buyers to buy or build a residential property. You must intend to live at the property as the owner and you can’t use it as an investment property for at least 6 months. Only one grant is given per eligible transaction – so if there were two people buying a house together they would only receive one grant. Also, the grant is not a cash payment made directly to the person, rather it is given to your home lender at the date of contract and applied directly to your home loan.

Eligibility

• Must be an Australian Citizen or permanent resident.
• At least 18 years of age.
• Be a first home buyer who have not previously owned or had interest in a property in Australia either separately or jointly.
• Intend to be owner occupiers of the property, not an investment – for at least 6 months.
• Couples are only eligible if they are married or in a de-facto relationship with each other.

First Home Loan Deposit Scheme (FHLDS)

This is a new initiative made by the government to help support eligible first-home buyers who purchase a home. It does this by providing a guarantee that allows eligible first-home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent. The difference between this and the First Home Owners Grant is that you do not receive a cash benefit from the Government, rather it is a guarantee of being able to purchase a home with a 5% deposit. So you can eliminate the hassle of trying to save a large sum for a deposit!

Eligibility

• Must be an Australian Citizen (sorry- permanent residents can’t apply!).
• At least 18 years of age.
• A first home buyer who has not previously owned or had interest in a property in Australia, either separately or jointly.
• Intend to be the owner occupier of the property, not an investment – for at least 6 months.
• Couples are only eligible if they are married or in a de-facto relationship with each other.
• The Scheme is to assist singles and couples (together) who have at least 5% deposit saved. If you have 20% or more saved, then you will not be covered.
• Scheduled repayments of the principal and interest of the loan are required for the full period of the agreement.

Keystart

Keystart began in 1989 as an initiative of the WA State Government and has helped with over 100,000 West Australians get their own home. Their loans are designed to help people get into their new homes faster by having lower entry costs. But they are also a traditional lender, so they encourage people to refinance with another lender when they are ready to do so.

How are they different?

Firstly, they are not a bank – they only specialise in home loans, nothing else.
They are also not a government agency.
Their home loan deposits start from only 2%, rather than the traditional 5% to 20%.
There is no lender’s mortgage insurance or any monthly account fees.

Eligibility

• Must be an Australian Citizen or permanent resident.
• At least 18 years of age.
• Be living in Western Australia and wanting to buy or build here.
• Have an income within their maximum limits.
• Not own another home or land at the time of settlement of your Keystart loan.
• Plan to live in your home for the duration of your loan with Keystart.
• Have enough funds available to cover all costs associated with the purchase, including your deposit, fees and any moving costs.