The Federal Government recently announced they are working towards establishing the First Home Buyer Scheme by January 1 2020.
It’s been recognised that one of the roadblocks for first home buyers is the time it takes to save for a 20% deposit required by most lenders.
Other lenders will accept 5% deposit, but only if you accept LMI (Lender’s Mortgage Insurance) on top of your loan. Over the lifetime of a mortgage, LMI can cost first home buyers thousands.
This presents a challenge as first home buyers want to secure homes at present prices, but may instead have to save for longer to avoid LMI.
The First Home Buyer Scheme is working to eradicate this challenge for first home buyers by guaranteeing 15% of a deposit if you have already saved 5%. This will apply for home & land up to $600,000 in Junction Village, where Octave is located. Octave has a range of townhomes and house & land packages under $600,000 making the community a great option to take advantage of this scheme.
You will still need to borrow and pay back 95% of the property’s value; the scheme just enables borrowers to do this without having LMI placed on top.
What’s next?
- There are criteria for applicants, including
- As a single first home buyer, you must earn under $125,000 p.a
- As a couple, you must earn under $200,000 p.a and both be first home buyers
- You can’t apply if you have an investment property
- The scheme will be limited to 10,000 borrowers nationwide in 2020.
- The application process is yet to be announced, keep an eye out for more details
- Enquire on Octave to find out more on which packages would suit you for this scheme
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