10 Jan 2020

It could be said that 2020 may be the year of the First Home Buyer. With low interest rates, favourable changes in banks’ servicing rates and lenders generally clamoring over themselves to win new business now is a great time for first home buyers to look at entering the property market.

But its not only the lending climate that’s on the first home buyer’s side. Its worthwhile to consider what government grants are currently on offer that may influence what you buy and in what price point. Here is a snapshot of the first home buyer grants available in 2020.

The First Home Owner Grant

In WA, the First Home Owner Grant is currently $10,000 and is available to those purchasers who enter into a contract to buy or build a new residential property. This may also be applicable for the purchase of a substantially renovated home but eligibility is determined on a case by case basis.

For those first home buyers purchasing an established property you may be eligible for a stamp duty concession, applicable also to those purchasing a new property. For property purchases under $430,000 no stamp duty is payable and from $430,000 to $530,000 the stamp duty concession gradually reduces until the full duty amount is payable.

For more information see https://www.wa.gov.au/organisation/department-of-finance/fhog

The First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme which came into effect on 1st January 2020, allows eligible first home buyers to get a home loan with just a five percent deposit of the property value being purchased. These buyers will also be exempt from paying Lender’s Mortgage insurance as the government will guarantee the balance of the loan and cover the LMI costs.

To qualify, the scheme is available to singles on a taxable income up to $125,000 and couples on a combined taxable income of up to $200,000 with loans having principal and interest repayments and being for owner occupied purposes only. The property value thresholds applicable in WA are $400,000 for Capital city and regional centres and $300,000 for the rest of the state.

There are only 10,000 loan guarantees available per year and they will go to the first successful 10,000 applicants. Currently there are only two major banks participating in the scheme, CBA and NAB with the rest of the loans being provided by smaller lenders including CUA, Australian Military Bank My State Bank and P&N Bank.

For more information see https://www.nhfic.gov.au/what-we-do/fhlds

Home Buyers Assistance Account

The Home Buyers Assistance Account reimburses some of the incidental expenses incurred when purchasing a first home in WA, up to $2,000. Expenses that may be reimbursed include mortgage registration fees, conveyancing charges, property inspection fees and mortgage establishment fees.

The grant is eligible for purchases up to $400,000 for first home buyers purchasing an established owner-occupied property through a licensed real estate agent with the intention to live in the property for at least 12 months.

As well as these helpful grants, many lenders have offers for First Home Buyers in the form of fee waivers, discounted products and even rebates. Check with your Blackburne Mortgage Broker to find out what offers may work for your unique circumstance and make 2020 the year of the First Home Buyer for you!

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