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First Home Guarantee – 5% Deposit for First Home Buyers
140 Plays3 months ago
In this episode of the Buying Your First Home Podcast, we're diving into the latest and greatest news for first home buyers in Australia. The government has just released 50,000 new spots in the Home Guarantee Scheme, effective from July 1, 2024. And that's not all—New Zealand citizens holding the special category visa 444 are now eligible too!
We'll break down the three types of guarantees: the First Home Guarantee, the Regional First Home Guarantee, and the Family Home Guarantee. Learn how these schemes can help you buy a home with a smaller deposit and avoid lenders mortgage insurance, potentially saving you thousands.
Discover why this scheme is a game-changer for first home buyers, single parents, and those looking to buy in regional areas. We'll also cover the eligibility criteria, application process, and tips on how to secure your spot. Join us as we unlock the door to your new home and help you navigate the Australian housing market with confidence.
Visit HunterGalloway.com.au for a free assessment and more info on how we can help you on your journey to homeownership.
Tune in now and take the first step towards making your home-buying dreams a reality!
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Transcript
Introduction to Home Guarantee Scheme
00:00:00
Speaker
Massive news today with the government releasing new spots in the home guarantee scheme. There's also some big changes if you're a New Zealand citizen, so listen up.
Guiding Through the Australian Housing Market
00:00:09
Speaker
Welcome to the Buying Your First Home Podcast, your personal guide through the Australian housing market. Here we tackle the big questions and the small details that come up when buying your first home. From financial prep to finding the right neighbourhood, we're here to ensure that you've got all the knowledge at your fingertips. So let's take the first step towards unlocking the door to your new home.
Eligibility for Home Guarantee Scheme
00:00:34
Speaker
From the 1st of July, 2024, the government is releasing 50,000 new spots to the home guarantee scheme. This is a huge boost for first home buyers, single parents or anyone looking at buying in regional areas. The single biggest update this year became effective on the 21st of June. This allows New Zealand citizens holding the special category visa 444 to be eligible for the home guarantee scheme. This is massive news. It allows anyone that's a permanent resident, Australian citizen or New Zealand citizen living in Australia to be eligible for the scheme.
Explaining the Home Guarantee Options
00:01:01
Speaker
So let's break down the three types of guarantees. The first is the first home guarantee. This supports eligible first home buyers or anyone that hasn't owned a home for the last 10 years to buy a house with as little as a 5% deposit. The second is the regional first home guarantee. To be eligible for the scheme, you'll need to have lived in the regional area for at least 12 months before and there are some exemptions with work relocations.
00:01:21
Speaker
The third is the family home guarantee. It helps single parents or legal guardians buy a home with as little as 2%
Understanding Scheme Benefits
00:01:27
Speaker
deposit. So how does the first home guarantee scheme work? It allows eligible buyers to purchase a home with a smaller deposit with a guarantee being provided by the government. This guarantee can be up to 15% for people under the home guarantee scheme and regional guarantee scheme and up to 18% under the family home guarantee. This means you can avoid paying lenders mortgage insurance which can save you 20 to 30 thousand dollars. I think the biggest benefit of this scheme is the government isn't taking any ownership of your property. Under some of the shared equity schemes that you might have seen, the government actually becomes a part owner of your home. So in other words, if you do a shared equity scheme, when you go and sell your home, if there's profits, the government keeps a portion of that. Also using the shared equity scheme, if you want to make changes to the property, you're potentially restricted because the government owns part of the property with you.
00:02:09
Speaker
That is not the case with the home guarantee scheme, with the family or the regional guarantee schemes. With these schemes, the government doesn't own a portion of your property. They're just giving you a guarantee if something goes wrong.
Application and Broker Assistance
00:02:19
Speaker
So under any of these schemes, you get to do what you want with the property and also you keep all the profits at the end. The main benefit of this scheme is it allows you to get in the market quicker without paying that lender's mortgage insurance. you're still gonna need at least a 5% deposit and meet the bank criteria. Now let's talk about eligibility. Each guarantee scheme has a specific criteria, but generally you'll need to be an Australian citizen, permanent resident, or eligible New as zealand Zealand citizen. There's an income threshold to meet. For the 2023-2024 year, your individual taxes will income needs to be under 125,000 if you apply on your own, or under $200,000 combined if you're a couple. The application process is pretty straightforward. You need to have done your tax return for the financial year ending June 30, 2024, and they base your income on that notice assessment amount. As your broker will help secure you a spot and also get a pre-approval to make sure you're eligible and ready to buy. You'll need to provide the home buyer declaration, but we'll help you out with that. It's essentially a form of saying that yes, you're definitely eligible for the scheme, hear your details and you haven't applied for it before. You also need to look at participating lenders. Not all banks can do this scheme, so you want to work with a broker that has experience and know the leads and outs.
00:03:19
Speaker
At Hunter Galloway we've helped hundreds of home buyers to buy under the home guarantee scheme. We've saved them tens of thousands of dollars in lenders mortgage insurance. If you want some free info, hit us up at our website below huntergalloway.com.au. We can give you a free assessment and find out if you're eligible or if you're looking at buying next year we can help get you on the pathway. And until next time, see you guys.