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First Home Owners Grant 

The First Home Owner Grant is a government scheme that was introduced in 2000 to offset the effect of Goods and Services Tax (GST) on buying or building a home.

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It’s a one-off payment for eligible first home buyers who purchase or build a residential property to live in. The First Home Owner Grant isn’t means tested, which means the eligibility criteria isn’t based on financial considerations, such as your income.

 

How Does It Work?

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The grant amount, eligibility criteria and payment details of First Home Owner Grants vary between states and territories, so it’s important to check this out when you apply for your home loan. Usually may be eligible if you:

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  • Are a permanent resident or citizen of Australia

  • Have never received the grant or owned residential property

  • Are the minimum age set by your state or territory

  • Are buying a new or established home as an individual (not company or trust)

  • Will live in the residence for the minimum time determined by your state or territory (the grant is not available on investment properties)

  • Apply for the grant within 12 months of settlement

 

The grant is usually paid at the time of settlement to your home lender and applied directly to your home loan. If you are building a home, the grant will be approved when your first loan repayment is due.

Some state and territories have additional grants for the first home buyers who purchase or build a home, especially in regional areas. We can help you apply for the First Home Owner Grant and any other benefits you are eligible to including stamp duty waiver.

Securing Your Deposit 

There are few concepts to get your head around before you can get a good estimate of how much you’ll need for your house deposit Here below we run through some basics but it is best that you discuss this with us to have a better understanding based on your personal circumstances.
 

Let’s get started
 

Three reasons why a bigger deposit may be better:

 

  1. A big deposit shows the lender what a great saver you are – and this could increase the likelihood of your home loan application being approved.

  2. A bigger deposit may mean not having to borrow as much money, which may mean paying less interest over the life of your home loan. It could also mean paying off your loan sooner.

  3. If your deposit is less than 20% of the lender-assessed property value, there may be added costs involved in getting a home loan. This is partly because you may need to pay for Lenders Mortgage Insurance.

Some important concepts to get your head around

Loan to Value Ratio (LVR)

LVR is basically how much you need to borrow, expressed as a percentage of the lender-assessed property value.
 

For example, if you have a deposit of 20% of the lender-assessed property value, you may need a home loan for the remaining 80%. That means your LVR would be 80%.
 

In a nutshell, LVR is important because it affects whether you may need to pay for Lenders Mortgage Insurance.

What’s Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI)

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Generally, LMI is a type of insurance you may need to pay for if your LVR is over 80%. Basically, it provides protection to your home loan lender in the event you default on your home loan. If the proceeds from the sale of your house aren’t enough to pay back the amount owing on your mortgage, LMI may cover the lender for that loss.

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