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What all you need to know about the First Home Loan Deposit scheme?

What all you need to know about the First Home Loan Deposit scheme?

When it comes to applying for loans, it is very much important to acknowledge that there is a loan that is known with the name of First Home Loan Deposit Scheme has been designed to help those who come under the eligibility of the property market sooner. But do you know how it really works? And what are the requirements you need to consider to get this loan and if you are eligible how you can apply? Well, through this article, we will explore everything you need to know about the First Home Loan Deposit scheme that is very much important to invest.

 

Are you eligible for the First Home Loan Deposit scheme?

The first Home Loan Deposit scheme began on 1 Jan 2020. It allows the eligible first home buyers to purchase the property with a five percent deposit and without any need to take the lender’s mortgage insurance. According to the Accounts NextGen, the scheme doesn’t offer cash payment, you can use it in the conjunction with any other govt grants, schemes, waivers, and more.

 

First Home loan Deposit scheme new home guarantee

As a part of the federal budget set for 2020-21, the Australian govt has committed an additional 10,000 First Home loan Deposit scheme places for the 2020-21 financial year which is specifically eligible for the first home buyers purchasing new homes. There is a New Home Guarantee according to the Accounts NextGenand it has been established to support the Government’s economic stimulus set norms and hence can create jobs in the residential construction sector.

 

How to apply for the First Home loan deposit scheme?

The NAB ad CBA are two of the major lenders when it comes to the First Home loan deposit scheme. These two are selected to participate with a total allocation of 5000 grants that are shared between both parties. This clearly means that you can jump in and apply for a place in the scheme with the related estate norms that are described by Accounts NextGen.

 

Some of the listed lenders allocated the 5000 places

  • Bank Australia
  • Australian Military Bank
  • Bendigo Bank
  • Auswide Bank
  • Community First Credit Union
  • Beyond Bank Australia
  • Bank First
  • Defence Bank
  • Bank of us
  • Gateway Bank
  • G&C Mutual Bank
  • Mortgageport
  • CUA
  • People’s Choice Credit Union
  • P&N Bank
  • Queensland Country Credit Union
  • Indigenous Business Australia
  • QBANK
  • MyState Bank
  • Police Bank (including the Border Bank and Bank of Heritage Isle)
  • Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank Ltd)
  • The Mutual Bank
  • WAW Credit Union
  • Teachers Mutual Bank Limited (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank, and UniBank)
  • Regional Australia Bank

 

Point to remember:Accounts NextGen explains that in order to apply to the scheme, you will be subjected to follow the eligibility criteria. You just need to provide certain documentation of the eligibility to secure the position.

 

What is the Eligibility criteria for First Home Buyers?

  • All the applicants must be eligible for getting into the First Home Loan Deposit scheme and must not have interest in the residential property. The individual applicants have earned less than $1,25,000 or the $2,00,000 for the couples in the last financial year.
  • The couples must be married or in a de facto relationship. Other persons buying together that are eligible.
  • All the applicants must be at least 18 years of age and have valid medicare care.
  • Applicants must have a deposit of between 5% and 20% of the property’s value.
  • All the applicants must be Australian citizens with a valid Australian passport
  • Your purchased property price must be within the property prices threshold according to the Accounts NextGen.
  • You can also check the property price cap for the area of the NHFIC online tool.

 

In a conclusive viewpoint:

By concluding this article we now hope that this piece of information has helped when you are planning to invest your hard-earned money in the First Home Loan Deposit scheme.

How to apply for your First Home Owner Grant

First Home Buyer Grant worth $10,000 is available for all those who are either buying or building a new home. And this grant’s value is about $20,000 for those who buy a new home or build a new home in regional Victoria. All those who have signed the contract of their home between 1 July 2017 – 30 June 2021. One thing that you have to keep in mind is the home you are about to buy or build should not be a holiday house or an investment property. In the later sections of the blog, we will also talk about First Home Loan Deposit Scheme.

Who is eligible for this scheme?

There is a very simple way of checking your eligibility for this scheme. If you open the Application for First Home Owner Grant and then answer the seven questions. Your answer to these 7 questions will determine whether you are eligible for this scheme or not. If any of the cases mentioned below are true for you, you may not be eligible for this scheme:

  • if you have owned a home or any other residential property in Australia before 1 July 2000.
  • If you have been living in a home for the last six months continuously that you have either owned completely or partly.
  • If you have got the grant of the first-home owner in Australia.

Even if you own a home in Australia that you bought on or after 1 July 2000, and have not lived there as your home you are eligible for this scheme.

These are the conditions that can make your eligible for this scheme:

  • In case you have occupied a home as your principal place of residence and are living there for the last 12 months and you should be 18 years old or more.
  • You should be an Australian citizen or a permanent resident of this country.

Required documents to apply for this grant:

There are two ways you can apply for this scheme. You can do it with the help of a registered agent or with an official government department responsible for this scheme.

For those who are using a registered agent for this purpose, you have to give him the document showing your primary identity. But those who are applying with the help of an official government department have to provide a document for each of the four categories mentioned below:

  1. 1st Category:
  • You have to provide proof showing that you are a citizen of this country. For those who are Australian citizens have to provide the following documents:
  • A certificate showing that you are the citizen of Australia.
  • Current Australian passport.
  • Birth certificate issued by Australian Registry of Births, deaths, and marriages.
  • For the citizens of other countries:
  • Proof of permanent residency.
  • Current passport.
  • For a citizen of New Zealand:
  • Only a current passport.
  1. 2nd category:
  • In this category, the documents are needed to show the identity of the person. You can provide the following documents:
  • Firearm license.
  • A current passport.
  • ID card showing your photo and age.
  • Driving license.
  1. 3rd Category:
  • Proof showing that you are living in Australia. The documents needed to prove it is:
  • Department of Veterans’ Affairs or Centrelink card.
  • Document showing the registration of your motor vehicle.
  • Medicare card
  1. 4th Category:
  • Proof showing your or your spouse’s current residential address. These are the required documents for it:
  • Electricity bills, gas bills, or water bills.
  • Contents insurance policy or building insurance policy.
  • Rate notice.
  • Your electoral enrolment card.
  • Assessment notice for taxation.
  • Agreement of lease or tenancy.
  1. There are several other evidence you have to present:
  • If you are married, you have to present a marriage certificate.
  • Divorced persons have to provide a divorce certificate.
  • Widowed individuals have to provide the death certificate copy of their spouse.

Completing your application:

You don’t have to know about the guidelines if your work is being done by a registered agent. But those who are doing it on their own have to read the guidelines properly. Make sure you know about every guideline before submitting your application. The First Home Owner Grant (FHOG-Form-02) needs to be printed and then signed by the applicant before lodging the application.

Lodge the application:

In case you are using an agent for this purpose, you need to sign the application and your agent will do the same. And if you are doing it by yourself, you need to mail the application to the following address.

State Revenue Office

GPO Box 1641

Melbourne

VIC 3001

Or

State Revenue Office

DX 260090

Melbourne

The First Home Loan Deposit Scheme:

This scheme was introduced in the Federal Budget for the year 2020-2021. There is an arrangement for 10,000 more Aussies to buying new homes. This scheme is very essential because those people will get to live in their homes by paying only 5% of the total amount. This is a huge relief for such people as people had to pay at least 20% of the total amount.

How to apply for it?

There are various lenders who have participated in this scheme. You can contact anyone of them for grabbing this scheme. The time when you apply for this scheme will decide whether there is a home available for you. If you opt for a loan that is supported by this scheme, you can apply to more than one lender at a time.

Eligibility:

There will be different tests. These tests would be regarding different aspects of your life and they include:

  • A requirement of owner-occupier.
  • A deposit requirement.
  • Test whether you are of the required age.
  • Test regarding your prior property ownership.
  • An income test.

Conclusion:

The date on which you will receive the grant depends on whether you are buying a home or building one.

All you need to know if you are a first home buyer in Australia

There are a lot of grants and incentives being provided to the first home buyers in Australia. In this blog, we are going to discuss everything that you need to know about buying your first home in Australia.

Eligibility, average cost, and grants available for first home:

The age of the first home buyer in Australia is 29 years. And the average cost for the first home is about $300,000- $400,000. The First Home Owner Grant (FHOG) is a very essential scheme. If one is successful in getting this scheme, you can get your new home with a deposit as a low as 5%. Almost everyone who plans to buy a new home needs to apply for a loan. In the later section of the blog, we are going to talk about how you can get a loan for your first home?

Getting a loan for your first home:

  1. Try to choose your option carefully:
  • You should talk to your friends and experts to know more about getting better loans. At first, you need to analyze your financial situation and then try finding a loan that suits your requirements. Taking a loan is not a one-time process. You have to repay the loan amount over a fixed period of time. That is why you have to consider all the factors carefully before opting for any loan. Start saving money so that you can pay at least 20% of the total amount of the home.
  1. Gather information about different types of properties:
  • There are different types of properties available to you. Based on your requirements, you will opt for a house or an apartment. Before you apply for a loan, make sure you know all the pros and cons of the property type available before you.
  1. Find a proper loan for your home:
  • Now that you are aware of the type of home you want to buy. Contact some broker or property dealer before making your final decision. Check for some schemes and other grants that would give you a more precise idea about how much money you need.
  1. Get pre-approved finance for your home:
  • This is a very important thing in the process of buying a new home. Pre-approved finance for your home will tell you exactly how much money you can borrow. And this amount depends a lot on your financial situation. You can talk to real estate agents and other property dealers for more information in this regard.
  1. Apply for your full loan approval:
  • After you have got a clear idea about how expenses, you have to apply for the full loan approval. There are several auctions involved and you have to be the best bidder. Now, a sales agent may help you a lot in getting this deal done over time. Make sure that your deal meets all your obligations.
  • Now, the lender will verify all your applications and other eligibility for this loan.
  1. Now comes the settlement:
  • This is the final stage of completing your deal. The settlement is a process of transferring the property from one hand to the other via a legal process. Now the seller will give you the keys to your home or apartment. But you have to apply for the grants or incentives before initializing your settlement deals.
  • At first, you will get the contract documents from your lender then you have to reply to him with your building insurance papers and then at last your settlement will be booked.

The HomeBuilder Grant:

Now that you are aware of the process to get a new home with the help of a loan. It is time that you know about the grants that are available in different stated of Australia. The HomeBuilder grant is available for either building a home or buying a new home.

Eligibility:

To become eligible for this scheme, you should meet the following criteria:

  • You should be an Australian citizen and 18 years old or more.
  • You should be an individual, not a trust or any other organization.

Documents required:

The table given below contains the details of the documents that you have to submit.

Dwelling categoryCriteria for eligibilityRequired documentation
All·       Should be an Australian citizen

·       An individual

·       18 years old or more than that

·       Licensed builder or registered before 4 June 2020

·       Copy of your current passport, Australian Birth certificate, and citizenship certificate of Australia.

·       Photo identification form of yours (like driving license)

·       If your name on any document differs from some other, you need to present proof that you have changed the name.

·       Copy of the license of the builder. The registration should have been done before 4 June 2020.

AllEligibility for the income caps:

·       Not more than $125,000 for an individual

·       Below $200,000 for a couple

 

·       Evidence from the income tax department that shows your income
New Build·       The value of your property should not be more than $750,000.·       Copy of a certificate that shows the property is registered in the name of the applicant.

·       Copy of home building contract but the contract should have signed between 4 June 2020 – 31 December 2020.

·       Copy of a document showing the value of your land. (it could be a copy of front and execution pages of the contract for the sale of land or a copy of your latest rate notice).

·       Proof showing your construction commencement along with the evidence showing that the foundations have been laid and you have paid the required amount of money to the contractor.

·       Proof showing that the property for which you have applied is your principal place of residence.

Renovation·       The contract value of the building should lie between $150,000 – $750,000.

·       The property value should be less than $1.5 million.

·       Copy of the certificate showing you are the owner of the property.

·       Copy of the contract of building showing the renovations and this contract should have been signed between 4 June 2020 to 31 December 2020.

·       Copy of a document showing the construction commencement (invoice issued for the renovation works)

·       Copy of latest rate notice to show the value of that property

Off-the-plan·       The value of the property should be less than $750,000·       Proof showing the commencement of construction

·       Evidence to prove that this place will be your principal residence

·       Copy of the front and execution pages of the sales contract. The contract should have signed between 4 June 2020 – 31 June 2020.

·       Copy of a certificate showing that you are the owner of the property.

Conclusion:

This blog has told you all about how to get a loan and all the processes involved in buying your first home experiences.

Extension of First Home Loan Deposit scheme and the caps have increased

As we all know that the Federal government helped about 20,000 people to get a new home by giving only 5% of the total cost. Initially, it was for 10,000 people but after that, the scheme was extended and 10,000 more people were allowed to get homes through the same scheme.

Then, all those people got another benefit from the federal government. The caps on these prices have been increased to $950,000 from $750,000. Josh Frydenberg said that all these decisions are being taken because the residential construction industry is about 5% of the total GDP of Australia.

The extension in this scheme will allow another 10,000 people to get new homes. And the scheme is not only for first home buyers but the whole chain involved in this field will be benefited. The tradies along with builders and construction workers, all will benefit from this scheme.

The government has supported first home buyers in many ways. The Government will start providing other 10,000 homes from October 6, and the homes will be ready before 30 June 2021.

At first, you have to apply for this scheme and the eligible candidates will get homes in the cities of Perth($550,000), Brisbane ($650,000), Melbourne ($850,000), and Sydney ($950,000).

Australia has always been one of the best spots for first home buyers. There are several factors that have made Australia gain this reputation. Due to the Coronavirus COVID-19, the economy faced a very tough situation. But all these schemes are intended to get everything on track now. Lending rates are on record low and the government is providing several other schemes. All these situations when combines together create a huge opportunity for the field of construction.

Due to the pandemic, the economy of Australia has got down to 7%. And, there was another prediction from the National Housing Finance and Investment Commission that the housing demand will fall tremendously over the next 2-3 years. That is the main reason behind launching such schemes.

Take a look at the list of caps increased in different states of Australia:

StateCapital CityRest of state
NT$550,000N/A
ACT$550,000N/A
TAS$550,000$400,000
SA$550,000$400,000
WA$550,000$400,000
QLD$650,000$500,000
VIC$850,000$550,000
NSW$950,000$600,000

 

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