It’s game time! Applications are now being accepted for the first home loan deposit schemes.

If you want to buy your first home with just a 5% down payment and no lenders mortgage insurance (LMI), you'll need to act quickly, as thousands of first-time buyers are expected to apply for the limited spaces available.

If you’re a single parent with children under the age of 18, a similar plan now allows you to buy a home with just a 2% deposit and avoid paying LMI, regardless of whether you’re a first-time buyer or not.

There are three federal government programs in all, each of which offered a new round of 10,000 slots on July 1.

We’ll go over each concept in detail below.

The First Home Loan Deposit Scheme (first home buyers)

The First Home Loan Deposit Scheme (FHLDS) allows eligible first-time buyers to acquire a home with just a 5% deposit and avoid paying LMI.

This is because the federal government guarantees up to 15% of the value of the property purchased (to a participating lender).

Depending on the home price and deposit amount, not paying LMI can save purchasers anywhere from $4,000 to $35,000.

This financial year, just 10,000 spaces are available for this scheme, as with the other two schemes below, and they’ve been allotted within a few months in past years. As a result, you must act quickly!

The New Home Guarantee scheme (first home buyers)

With the New House Guarantee scheme, qualifying first-time buyers can build or buy a new home with just a 5% deposit.

Overall, it’s a plan that’s very similar to the FHLDS.

One of the most significant distinctions is that the property price caps are higher (see here) to account for the additional costs of building a new home.

The Family Home Guarantee scheme (single parents)

With the new Family Home Guarantee, qualifying single parents with children can build or buy a home with just a 2% deposit and avoid paying LMI.

Unlike the other two plans, this one does not require you to be a first-time buyer.

Here’s an illustration of how it works.

Chris and David, John’s two young sons, are a single parent. While paying rent, John has located the right home for $460,000 but has struggled to save enough for the minimum $92,000 deposit (20%).

With the Family Home Guarantee and the approval of his loan application, John could move into his ideal home sooner, with just a $9,200 down payment (2 percent ).

Please contact us right away.

We can’t stress enough how important it is to apply for the three no-LMI plans as soon as possible to avoid disappointment.

In prior years, the FHLDS’ 10,000 slots have been snapped up in a matter of months, and we’ve had a number of prospective applicants come out to us after it’s too late.

So, to avoid disappointment, contact us today and we’ll help you figure out which scheme is best for you, and then assist you in applying for financing with a participating lender.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au

Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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