First Home Guarantee

First Home Guarantee

Welcome to your all-in-one guide to the First Home Guarantee Scheme in 2023 (which was formerly known as the First Home Loan Deposit Scheme).

In this straightforward guide, we'll cover:

In this segment, I’ll walk you through the key basics of the Home Guarantee Scheme. If you’re a not familiar to this scheme, you’re going to find this part really handy! As we progress, we’ll dive into more advanced advice, tactics, methods, and real-world examples especially for those buying their first home.

But for now, let’s concentrate on the fundamental aspects of the Home Guarantee Scheme.

New Updates to the FHBG for 2023 - 2024

As of July 1, 2023, there will be some changes to the FHBG to increase its availability:

  • Now, not just individuals but also groups of friends, siblings, and other family members can benefit from it.
  • If you’ve not owned a home in the past 10 years, you can apply, even if you’re not a first-time buyer.
  • Borrowers who are single legal guardians of kids, like aunts, uncles, and grandparents, can go for the Family Home Guarantee.
  • Thanks to these changes, owning a home could be a reality for more folks in Australia!

Remember, there’s a limit of 35,000 spots each year, so you better hurry!

Simple Guide to Getting a Home Guarantee

Planning to buy a house or relocate in 2023? Let’s discuss how you can get started with the Home Guarantee Scheme. Here, you’ll find various helpful tips and tactics I’ve learned from helping first-time homeowners. If you’re wondering whether you’re eligible or are looking to get a Home Guarantee spot before it’s gone, you’re in the right place!

  • If you’re applying by yourself, your earnings should be less than $125,000.
  • If you’re applying with someone else, your combined earnings should be less than $200,000.
  • The loan should be for a home you’re going to live in and repay both principal and interest.

First off, you should contact a mortgage broker or a lender who offers this scheme.

Apart from the usual details, you should provide your mortgage broker:

  • Your Medicare Card, and Position on the Card.
  • Your ATO Notice of Assessment for the tax year 2022-2023.
  • Standard home loan papers, like your salary slips and bank statements.
  • Signed First Home Buyer Declaration for FY2023-24 (download here).

Lenders will look at your income, loan amount, and past home-buying experiences.

To be considered, you’ll need to meet certain requirements:

  • The Loan to Value Ratio (LVR) is between 80% to 95%.
  • The cost of the property shouldn’t be more than the set limit for the area.
  • You are applying with one of the 32 approved lenders.
  • If there are two applicants, both should be first-time home buyers.
  • The loan is for a property to live in.
  • A maximum of two people can apply for the loan.
  • The property bought with the loan should be for living in.
  • The loan should be paid back within 30 years.

Under the Home Guarantee Scheme, apart from the basic 5% deposit, there are additional expenses such as stamp duty, bank charges, and legal fees.

Let’s illustrate with an example. If you’re a first-time homebuyer in Queensland, for a property worth $600,000, you’ll need at least a $30,000 deposit (which is 5% of the cost). However, you’ll need more funds to take care of other costs, such as:

  • Stamp Duty: $12,850
  • Transfer Duty: $1,751
  • Government Charges: $197
  • Bank Charges: $700 (this could include setup fees and assessment fees that could range from nothing to $700)
  • Conveyancing Fees: $2,000
  • Building/Pest Fees: $500
  • Lenders Mortgage Insurance: $0 (thanks to the Home Guarantee Scheme)

So, in addition to the initial $30,000, you will need an extra $18,098 to handle these fees, meaning your total deposit comes to $48,098.

Not sure if FHBG is the right scheme for you?

Let’s have a chat to find out what’s best for you!

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