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The First Home Buyers Scheme: How To Get Prepared So You’re Ahead Of The Competition

Have you heard about the federal government’s Home Guarantee Scheme? Previously called the First Home Loan Deposit Scheme, it allows you to buy your first home with a 5% deposit without the need to pay lenders’ mortgage insurance (LMI).

The First Home Loan Deposit Scheme enables eligible first home buyers to purchase a property with a deposit of as little as 5%, which means they can fast-track their property purchase by 4 to 4.5 years on average.

Not paying LMI can save you a lot of money! Depending on the property price and your deposit amount, you could save anywhere between $4,000 and $35,000. That’s a great way to make your home ownership dreams come true!

When July 1 arrives, many people will be vying for the 35,000 spots, so it’s important to do what you can to improve your chances. Here are some tips to give yourself the best possible chance of securing a spot. 

Get your 2021/2022 tax return done ASAP

Planning ahead can give you an advantage when it comes to securing one of the 35,000 FHB spots on July 1. Getting your 2021/22 tax return in order now can help you be in the best possible position to take advantage of those opportunities.

When lenders assess your home loan application, they will most likely require your most recent financial information, which will include your latest tax return.

So, now is the perfect time to:

  1. Speak to your employer to make sure they’ll provide your PAYG summary in a timely fashion.
  2. Book an appointment with your accountant ASAP to get your tax done
  3. Start compiling all your work-related expenses.

Contact one of our Broad Finance teams members to help you

Getting your tax return completed is just one crucial step in the process.

But it’s far from the only one. You will also need to have a good overview of your monthly expenses.

When lenders assess your application, they require an accurate picture of your monthly expenses and discretionary spending. This can take a little time to put together, but it’s worth it to get the loan you need.

And that’s where a team member at Broad Finance can help you.

Budgeting doesn’t have to be daunting! We can help you calculate your monthly budget – including your income and expenses – and give you an idea of your borrowing capacity. This way, you’ll know exactly what you can afford to buy.

If you’re looking to buy a home, it’s important to keep in mind the borrowing caps under the Home Guarantee Scheme. This scheme can help you finance your home purchase, but it’s important to be aware of the borrowing limits depending on the location you’re looking to buy in.  And lenders are now more strict when it comes to your debt-to-income ratio and home loan serviceability which contributes to your borrowing capacity.

Although there is some uncertainty about the timing, most experts agree that interest rates will trend upwards over the next year. This means that it’s a good idea to have a cushion in your budget to account for this potential increase.

The waitlist is now open so start preparing for your mortgage loan now

The Home Guarantee Scheme operates on a first-come, first-served basis, meaning that places are generally allocated to applicants as they are received.

So don’t let 35,000 spots lull you into a sense of complacency – they’ll go fast!

If you’re a first-time homebuyer eager to get into the property market, contact us today.

We can explain the scheme in more detail, help you check your eligibility, and take steps to get the ball rolling. The waitlist is now open. Reach out to get started, that way when spots become available on July 1, you’ll be ready to apply.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal. Nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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