Getting into your first home is a huge step and first homeowners will want to avail themselves of every offer of help available. So what should First Homebuyers understand when applying for the first home buyer’s grant? Rules differ slightly from State to State but n New South Wales the key considerations that need to be taken into account are:
1. How much deposit is needed?
The amount of deposit required to purchase a home is the amount of equity you will have in the home. Your deposit does not include any additional costs such as Lenders Mortgage Insurance(LMI), Stamp duty, transfer fees or legal fees. The lowest deposit that banks will consider is 5%.of the property’s value. Ordinarily, the financial institution would require LMI to cover loans with deposits less than 20%. However, there are various government first home buyer incentives including the First Home Loan Deposit Scheme (FHLDS), the New Home Guarantee (NHG) and the Family Home Guarantee (FHG) where the Federal government guarantees that portion of the loan that LMI would normally cover. If you qualify for any of these schemes that can represent a substantial saving for you.
2. What is the maximum purchase to qualify?
The first home owners grant of $10,000 is available for first home buyers who build or buy a new (or substantially renovated) home, The cost of building should not exceed 600,000 and the total purchase price including the land that the property is built on should be no more than $750,000.
3. Stamp Duty, Lender’s Mortgage Insurance and other costs
First Home Buyers
will need to be aware of and take into account all associated costs.
These costs could include Stamp Duty, Lender’s Mortgage Insurance, Conveyancing
Fees and Transfer Fees. Fortunately, in New South Wales, First Home Buyers may be eligible for stamp duty relief via the First Home Buyer Assistance Scheme. Buyers of existing properties up to a value of $650,000 are eligible for full stamp duty exemptions, while properties between $650,000 and $800,000 will be eligible for a concessional rate.
For new homes, the full concession is increased to homes valued up to $800,000 with concessional rates applicable for purchases up to $1,000,000
To be best placed to take advantage of the various concessions available, we recommend that you seek the assistance of the team at Australian Finance Hub. We can discuss your circumstances and walk you through the options available to you. Don’t delay, arrange your appointment today.