1 in 3 First Home Buyers Used Guarantee Schemes

1 in 3 First Home Buyers Used Guarantee Schemes

Buying your first home is a massive step, isn’t it? It’s a dream many of us share. But let’s be honest, getting that foot on the property ladder in Australia has its challenges. From juggling the numbers to securing a home loan, the whole process can be a bit dizzying.

But guess what? There’s some fantastic news! A recent report has shown that about 1 in 3 first home buyers in Australia used a government guarantee scheme during the 2022-2023 financial year. The number of guarantees was more than 32,500 which is an increase of approximately 39 percent from the previous year. The report also found that almost 10,000 households had transitioned out of the scheme due to accumulating enough equity and no longer requiring the guarantee. If you’ve been pondering how to make your home ownership dreams come true, this could be a game-changer for you.

So, What’s This All About?

You might be wondering what these government schemes are. Well, they’re basically a helping hand from the government to make it easier for you to buy a home. They include the First Home Guarantee, the Family Home Guarantee and the Regional First Home Buyer Guarantee.

Why Are People Jumping Onboard?

Well, the first reason is pretty clear—it makes owning a home a lot more achievable. The struggle to save up that 20% deposit is a common hurdle. It’s like trying to catch a bus that’s always just a few meters ahead, no matter how fast you run. But with a smaller deposit needed, the finish line is suddenly a lot closer.

The second reason is peace of mind. The process of buying a home can be nerve-wracking. It’s a maze of contracts, inspections, and negotiations. With a government scheme, you’ve got a reliable partner, easing the worry that comes with such a big decision.

But Is It Right for Me?

Like anything, these schemes have their pros and cons. On one hand, you’re saving a fair bit on upfront costs. On the other, a smaller deposit means you’ll have a bigger loan and may end up paying more in the long run. So, before jumping in, chat with a mortgage broker (like us!) to weigh your options. Also, not all homes qualify for the scheme. There’s usually a price cap, which varies depending on where you’re buying. So, if you’ve got your heart set on a ritzy penthouse overlooking Sydney Harbour, this scheme might not be the ticket.

A Few Tips Before You Dive In

• Do Your Research: Check out the government websites or chat with a mortgage broker to get the lowdown on eligibility criteria.
• Shop Around: Just because you’re using a government scheme doesn’t mean you should take the first loan you’re offered. There are still lots of options out there, so be choosy.
• Be Prepared: While you’re only putting down a 5% deposit, you’ll still have other costs like stamp duty and legal fees. Make sure you’ve got those covered.

In summary, the government schemes have become a popular route for many first home buyers, and it’s not hard to see why. They break down some of the barriers, making the whole process a bit less intimidating. So, if you’re thinking about buying your first home soon, this could be your chance to finally make that dream come true.

If you’ve got any more questions or you’re ready to take the plunge, give us a call. We’re here to help you through every step of the journey!