Ep15: Your Complete Guide to First Home owner grants – How much free money can you get! Part 1 of 2

Hey people, this is going to actually be a two-part series.

00:03

There's so much information that it's too long for one episode.

00:06

Part one will be all about the federal grants available to you, and Part 2 will be all the different state grants available.

00:13

So strap yourself in and let's get stuck into it.

00:16

Welcome to the Home Loan Insider.

00:21

I'm Max Lending, your industry insider, and we're lifting the lid on the finance market, guiding you on how to cut through the jargon, manage your finances and get investing into the property market.

00:48

Can you guess the theme of today's episode?

01:02

That's right, free money.

01:05

Today's your complete guide to all the grants that are out there and how much free money you can get your hands on.

01:13

I'm four coffees in.

01:15

I've been up all night sourcing all the information and there is a lot to get through.

01:20

In today's episode it will be the complete government grant resource for first home buyers.

01:27

I've done all the hard work so you don't have to.

01:30

So get a notepad and get that thing called a pen that you haven't used for the last 10 years.

01:35

And start taking notes.

01:37

This is a work of art.

01:39

Gold Nuggets will be pouring from my mouth.

01:42

You're not panning for gold today.

01:44

I'm giving it away.

01:46

OK, so while I'm talking myself up, let me just say that most people don't even know that these grants are available.

01:52

Not only that, most mortgage brokers don't even know.

01:56

I'm shocked that they don't, because people are leaving free money on the table.

02:01

Let's start with what the hell homebuyer grants are.

02:06

Basically, it's free money, either from the federal or state government.

02:10

And if you need me to explain the difference between the federal and state government, I'm not going to go to Google and search what that is.

02:16

OK, as we're in the middle of an affordability crisis, both these governments want to be seen as if they're actually helping first homebuyers get into the market.

02:25

And the best way of doing this is to create different types of grants with eligibility criteria.

02:30

And if you meet this criteria, then you unlock the free money.

02:33

Sounds pretty good, right?

02:35

Let's start with the federal government grants.

02:37

They call it the Home Guarantee Scheme, and this is the broader name for their grants.

02:42

There's three of these schemes, the first one being the first home guarantee.

02:48

This is basically where you only need a 5% deposit and the lender's mortgage insurance fee is waived.

02:53

If you want to know what the LMI or lender's mortgage insurance is, go back to episode one.

02:57

We talk about it there.

02:59

It's pretty good as it can save you, you know, close to $10,000 or above.

03:04

It's pretty broad as well.

03:05

So the property types for this can be existing properties, newly built properties, off the plan, vacant land, house and land packages, the list goes on.

03:15

It's quite broad, which is great because as you're going to find out fairly soon, the other schemes are quite limited in the type of houses that you can go for.

03:23

Now there's certain criteria that you have to meet, so let's go through it.

03:27

We'll just do it quite quickly.

03:29

You can be single, purchase with a partner, a friend, a sibling, a family member.

03:34

You need to have at least one of you as an Australian citizen or PR.

03:37

You need to be a first home buyer.

03:39

Or if you have previously owned a home before, you kind of owned a home for the last 10 years.

03:45

Your taxable income, if you're single, needs to be no more than $125,000, or if it's a joint application, no more than $200,000.

03:58

Now, especially a joint application, that can knock a lot of people out of this scheme.

04:02

It's not available though for all lenders, so make sure that the lender you want to use that they're actually eligible to offer this scheme, and unfortunately, there's property price caps.

04:14

So you can't buy a house over these values.

04:17

In NSW you can't buy a house over 900,000, Victoria 800,000, Queensland 700,000, WA, SA and Tasmania $600,000 each.

04:29

Not sure if I mentioned this previously though, these houses have to be owner occupied, so you have to have the intent to live in these in the next 12 months.

04:38

The grants, schemes, whatever you want to call them.

04:41

Unfortunately, are not available to investors.

04:45

The second federal scheme is called the Regional First Home Buyers Guarantee.

04:49

Look, basically it's exactly the same as what I just read out.

04:52

The only difference here is that at least one of the borrowers needs to have lived in the same regional area or adjacent area for the entire previous 12 months.

05:02

Hey guys, sorry to interrupt your regular listening.

05:05

We're just going on a small intermission.

05:07

If you're enjoying today's episode, we have many more just like it.

05:11

I'd recommend listening to episode 5, What's the different type of home loans?

05:15

Or episode one, What is an LVR?

05:18

Can it affect your interest rate?

05:21

That's intermission over.

05:23

Now back to the show.

05:25

The third scheme is called the Family Home Guarantee scheme.

05:28

This is an interesting one because it's targeted at single parents.

05:32

It's helped them get into their own home quicker.

05:34

They only need, now listen to this, they only need a 2% deposit and the government will waive or pay for the lender's mortgage insurance.

05:42

What the government's actually doing here is guaranteeing 18% of the value of the property.

05:47

This then allows you to not have to pay the LMI.

05:50

They don't own the property or anything like that.

05:52

So you actually, you're not confused, let me just break it down.

05:55

This is actually a maximum loan of 98%.

06:00

And Jesus, that is high.

06:03

But I get it.

06:04

It's designed to help single parents who are struggling to to actually get into the market.

06:08

Sounds great and all, but they'll still need to be able to service a ninety-eight percent loan.

06:14

And when you're a single parent, that's pretty bloody hard.

06:17

Let's go through the eligibility criteria for this.

06:20

You've got to be single.

06:21

OK, yeah, that makes sense.

06:24

You need to have a kid.

06:24

Yep.

06:25

All right.

06:25

At least one kid.

06:26

You need to be an Australian citizen or PR.

06:30

OK, now you can't earn any more than 100 and twenty-five $1000 a year.

06:36

Wow.

06:37

So what?

06:38

You've got to be a single parent.

06:39

You're not allowed to earn a lot of money.

06:41

Well, you're not allowed to earn earn over twenty-five $1000, which is not really a lot of money these days.

06:46

And that really what that's top of my head.

06:49

That's gonna let me limit you to what, a 350K to 400K sort of loan, if you're lucky.

06:55

Meaning that you have to what purchase a very small unit or an apartment somewhere at a 98% loan has to be a owner occupied purchase and the property can be existing as well, which is great.

07:06

Newly built off the plan, vacant land, house and land packages, blah blah blah.

07:11

OK, that's a that's an interesting one.

07:13

OK, so that's it for the federal grants.

07:15

So really what are these?

07:16

They're just waiving the LMI, which is great.

07:19

It's still about, you know, over a $10,000 saving, which is fantastic.

07:25

OK guys, that's the end of part one of our grants guide, so stay tuned for Part 2 coming out next week.

07:33

I hope you learnt something cause I know there was a lot of information there, but if you take notes and you get that free money, it's all gonna be worthwhile.

07:41

I know an LMI wave might not seem like a lot, but all this adds up when you're looking for your first home.

07:46

$10,000 here and there.

07:48

So that's to really help out.

07:50

Thank you very much guys for listening to another episode.

07:53

Don't forget to like and subscribe and share it to your family and friends if you liked the episode.

07:57

And as always, you stay classy and I'll see you at the next one.

08:15

That's what I want.

08:20

If you have a question that you would like answered on the show about budgeting, mortgages or finance, then drop us a line either via our socials, e-mail or website.

08:31

Details available in the show notes.

08:34

Any opinions and views expressed in this program are just that opinions.

08:39

All information is general in nature and should not be seen as financial, economic.

08:45

Legal, investment, accounting or tax advice.

08:49

This program makes no representation or warranty as to the accuracy or completeness of any information contained in this program.

08:57

You should consult a professional advisor in relation to your own personal circumstances.