As a first home buyer it can be easy to get stuck with all the decisions you have to make with purchasing your first home. One of the biggest ones being, should you buy an existing property or build a new home? With the Australian Government's First Home Loan Deposit Scheme (New Homes) more and more first home buyers are leaning towards building a new home. But, what is it you ask and what could it mean for you if you decide to build a new home?
Well, the First Home Loan Deposit Scheme (New Homes) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner.
As a first home buyer, the Scheme is designed to support you by providing a guarantee to your bank that allows you to use a deposit of as little as 5 percent when buying your first home.
Normally, anyone purchasing a property will need to save a 20% deposit (based on the property value) in order to avoid forking out extra to pay for Lenders Mortgage Insurance (LMI). Taking advantage of the First Home Loan Deposit Scheme (New Homes) will allow you to bypass Lenders Mortgage Insurance without having to stress about providing an extra 15% in your deposit.
As an approved lender for the First Home Loan Deposit Scheme (New Homes) we want to make sure we’re able to provide you with information that is easy to understand.
So, we went straight to the source – first home buyers (and our lovely Members), Kirby and Andrew to help us provide some insight into what it's like to build a new home with the First Home Loan Deposit Scheme (New Homes). Here is their story.
How did you find out about the First Home Loan Deposit Scheme (New Homes)?
We first found out about the Scheme through our broker as a possibility to help us cross the line to get approval. However, we weren’t aware that it was available for building a new home. So, when our broker let us know we could use this to build a new place we were eager to know more.
What was your living arrangement prior to buying your first home?
We were renting together by ourselves for a few years. We were growing tired of dealing with real estate agents and very keen to move into our own home.
What has the First Home Loan Deposit Scheme (New Homes) meant to you?
For us, it meant that we could potentially get over the line with our deposit and secure a home loan. We had a bit of consumer debt, so cutting out the Lenders Mortgage Insurance allowed us to obtain the finance that we needed to live out our dream of building our new house.
What type of property did you purchase with the First Home Loan Deposit Scheme (New Homes) and in what suburb?
We’ve just started our build which is for a low-set medium sized house (of 205sqm) with the land size we were after.
Our new home sits on land that was previously owned by Defence Housing called Blue Wattle Estate, so it’s quite close to the Army Barracks. This location is a great option for us if we decide to use this as an investment property in the future as it’s located in an area where there is stable rental demand.
How did you find the process?
Without our broker we would have been lost. He worked very hard for us.
When we applied for the scheme it was right at the start of the launch where everyone was chasing the grants, which meant all the banks were being inundated with applications. However, our broker and Queensland Country ensured that the whole process was extremely easy. There wasn’t much we had to do aside from fill out the required application.
We just had to gather our paperwork, hand it over and sign where we needed to.
Did you have any hesitations about the First Home Loan Deposit Scheme (New Homes), and were these overcome?
We didn’t have any hesitations about the Scheme, we were probably more so excited at the fact that it could help us get across the line with our home loan application.
What advice would you give to other people looking to take advantage of First Home Loan Deposit Scheme (New Homes)?
Do your homework. For us, we had a little bit of an advantage as we had applied for a home loan 18 months prior, but were knocked back due to not doing our homework and having the right people around us (like a good broker). The second time around, was a lot easier.
When you’re doing your homework it’s probably also important to look at which banks actually offer the First Home Loan Deposit Scheme (New Homes) as not everyone does.
What are you looking forward to / enjoying the most, living in your own home?
The fact that it’s ours and we don’t have to move again.
For us, it’s been a long time coming. All of our friends have watched us try and buy our own place and we’ve never been able to get across the line with a mortgage.
We were almost at the point where we were going to give up hope that we would ever be able to get there, but we finally did with the First Home Loan Deposit Scheme (New Homes).
Spending time in my favourite room of the house, which will be the kitchen is something I really look forward to. Our kitchen is very much the heart of our home and it’s been designed well for us to entertain and cook for years to come.
If after reading this you still have some questions on the First Home Loan Deposit Scheme (New Homes) or maybe want to get the ball rolling on your first home loan application, give our friendly team a call on 1800 075 078 or register your interest here.