Big Win for First Home Buyers
From 1 January 2020 eligible first home buyers will be able to access a scheme, where only 5 percent of the purchase price is all that’s needed under the first home buyers scheme.
It’s a means tested scheme limited to buyers that earn less than $125,000 a year as a single, or $200,000 a year as a couple.
How does it work?
If you have saved 5 per cent of the purchase price of your property, the government will guarantee the remaining 15 per cent of the deposit.
While you will still need to borrow 95 per cent of the purchase price from a lender, you will be able to avoid the lenders mortgage insurance, which is expensive often over $10,000.
Lenders Mortgage Insurance (LMI) A once off payment that protects a lender if a borrower is unable to repay their loan.
This is normally applied to home loans where the borrower has less than 20 per cent deposit. Under the new scheme it will be waived.
If you’re not eligible for this scheme there are other schemes you may be able to access at the state or territory level.
For more information contact Agent Angelo, Residential Sales Agent at Raine & Horne Parramatta 02 9635 4788, or visit https://www.raineandhorne.com.au/parramatta