Federal grant means business for first home buyers

This week we expect new First Home Buyer incentives to be released, and boy are we excited.
Victoria is a happy hunting ground for First Home Buyers wanting an affordable entrée to ownership.
The latest Australian Bureau of Statistics housing finance data showed Victoria accounted for 29.8% of all FHBs that took out loans in March. It’s way out in front of other states.

The Victorian Government has been pushing its First Home Owner Grant for some time, enticing younger buyers to step off the rental treadmill and into their own bricks and mortar. The Grant was supposed to finish this financial year, but with administrations around the word looking for ways to navigate quickly and safely through COVID-19 economic fog, the Andrews Government decided to extend the incentive for another year.
As it’s tailored for new or newly built homes, it’s a two-pronged economic initiative helping FHBs to make the leap to property ownership while stoking the building and construction sector at the same time.

We might be a tad biased, but Geelong FHBs are the ultimate winners in Victoria, if you ask us. We’re deemed a ‘regional’ centre under the Grant’s classifications, meaning FHBs are treated to a doubling of the grant to $20,000.

This financial leg-up really sharpens Geelong's appeal, with its buoyant property sector, a bayside lifestyle enriched by great food and wine, and ongoing economic initiatives including the decentralisation of government agencies and – most recently – the anchoring of the Spirit of Tasmania.

Geelong’s appeal will be amplified even further when the Federal Government’s First Home Loan Deposit Scheme recommences and hopes to have effects on central Geelong, Bellarine, Surf Coast, Golden Plains and Northern Geelong regions.

It will be re-introduced at a time when owner-occupant interest rates are at their lowest point. Those who have secure employment outlooks are ready to act, as evidenced by the recent year-on-year increase in auction clearance rates. Are you ready to take advantage of the scheme?

But just a little recap, first.

The FHLDS allows purchasers to save only 5% of a property’s purchase price as a deposit, rather than the typical 20%. The Federal Government effectively acts as a guarantor on the remaining 15% with a lender who is approved under the scheme. It’s not a cash handout.

The FHLDS enables FHBs to get into their own home faster, and without the need to stump up for Lender’s Mortgage Insurance.

But there are rules, including:

You can only secure your loan through one of 27 approved lenders under the scheme (NAB and Commonwealth are the two major banks, with the rest of the panel made up of quality lenders)
You need to show that you can accrue genuine savings

From July 1, there’ll be only 10,000 of the FHLDS placements available, which are proportionally allocated across the states, and released incrementally by the banks and lenders. Not all will be released at once. It's not a huge volume and many will miss out: in March, more than 10,000 FHBs took out new loan commitments across Australia.

But, at Loan Market Geelong, we’ve had great success in helping clients secure approvals through the FHLDS so far. We know how to prepare applicants so they can present themselves in the best financial position and prepare all the necessary documentation in a clear and compelling way for approval.

Get in contact with us today to get at the front of the queue on July 1.