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How can first home buyers in Melbourne and Regional Victoria purchase their dream home sooner?

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Maria Papa
Maria Papa is a senior finance expert specialising in home loans, investment loans, self-employed loans, Alt Doc loans, car loans, personal loans and loan protection. She has offices in Sydney and Melbourne. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au. MBM Mortgage Pty Ltd trading as Maverick Finance | ABN 28 149 301 084 | Credit Representative Number 403019 is authorised under Credit License Number 389328

With Melbourne’s median house price jumping 16.2% to $1,022,927 because of ultra low-interest rates and government stimulus, a growing number of first home buyers are scrimping and saving to secure a home loan. Yes, it can be tough to get a foot on the property ladder, but first home buyers should not give up. The secret is to take the first step of saving the 5% deposit. Here’s how.

1. First Home Buyers Assistance Scheme

First home buyers in Victoria do not pay stamp duty if they’re purchasing a property valued up to $600,000, while discounts will be available for homes valued between $600,000 to $750,000. This new rule took effect on 1 July 2017 and is applicable for both new and established homes.

What could this new scheme mean for you as a first home buyer?

It means savings of up to $15,535 in stamp duty (for a $600,000 property). It means that you can enter the property market with less deposit and thereby allowing you to own your dream home sooner.

A first home buyer in Melbourne purchasing a brand new property only needs to come up with the 5% genuine savings deposit and, coupled with the $10,000 grant, can buy his/her dream home sooner. A First Home Buyer in Regional Victoria should still come up with the 5% genuine savings deposit but gets a higher grant of $20,000 if you have entered into a contract between 01 July 2017 and 30 June 2021. From the 1st of July 2021, a first home buyer, whether in metro or regional Victoria, will get a $10,000 first home owners grant if purchasing a new home.

If your 5% deposit comes from a gift from your family, sale of an asset, bonus from work, a tax refund, sale of a car, or an inheritance, you can still purchase your home today even if the three months savings has not been established yet. First home buyers who have been renting for more than six months with a licensed property manager will consider rental history as genuine savings. You only need to provide a rental statement or tenant’s ledger.

2. Only a 5% deposit and no lender’s mortgage insurance (LMI) – until 30 June 2022 and only through participating lenders – for those who are eligible!

Under the First Home Loan Deposit Scheme, eligible first home buyers can buy or build a new home with as little as a 5% deposit. To avoid paying LMI, you need to have at least a 20% deposit, but under the FHLDS, the government guarantees the remaining 15% of the property purchase value.

3. First Home Owners Grant

First home buyers buying a new home or a substantially renovated home in VIC, with a value of less than $600,000, can qualify for the $10,000 first home owners’ grant. If you are buying land to build on, the combined value of the land and any home you intend to build must be less than $750,000 to qualify for the grant. 

4. Some lenders are offering bonus first home buyer incentives

From bonuses offered at settlement, conveyancing fee rebates, no account keeping, and establishment fees to no application and valuation fees – these are a few of the incentives offered by some lenders to attract first home buyers (however, these include specific criteria and conditions).

Accessing one or more of these schemes or incentives could provide the assistance you need to buy your first home. It could also potentially save you tens of thousands of dollars.

Properties first home buyers should avoid if they have very little deposit

There are now postcode restrictions for high-density and inner-city apartments in Melbourne, particularly in Southbank, South Wharf, Docklands, and Abbotsford. Where loan mortgage insurance is required in the loan application, you must speak to a broker to verify if the address of the property will not have any issues at the time of settlement, especially for off-the-plan purchases. A 20% deposit will reduce the risk for properties in this category.

Before considering any of these options, contact Maria Papa on 0430 144 008. We understand the emotional journey that many first home buyers face when seeking finance. We do our best to make things as simple and stress free as possible.


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