Many people in Australia use negative gearing to build long-term wealth. It is, however, not…
First Home Buyers Loan Deposit Scheme

As part of the election campaign, the Federal Government announced if re-elected, they would introduce the First Home Buyers Loan Deposit Scheme.
The Labor Shadow Treasurer has said if elected they will match the scheme.
How the First Home Buyers Loan Deposit Scheme will work
Whilst at this stage only “broad brush” details are available, the key elements of the First Home Buyers Loan Deposit Scheme are:

Not all Lenders will participate in the scheme
At this stage, it is proposed that the Scheme will only be available through private and smaller Lenders.
The stated intention is to “boost competition”.
No details are available as to who the actual Lenders will be.
It is a Guarantee not a Grant!
It is important to note; the First Home Buyers Deposit Scheme is not a Grant.
The Government simply guarantees 15% of the loan amount – to allow Lenders to approve borrowings for applicants with a 5% deposit.
Borrowers will still be borrowing 95% of the purchase price – which they will need to repay.
Debt Serviceability Criteria Still Apply
Despite the Guarantee, applicants will still need to demonstrate that they can adequately service what they will be borrowing.
With this in mind it is vital to plan ahead to avoid frustrating delays and disappointment!
Summary
Whilst a lot more detail is needed as to exactly how it will work, if the First Home Buyers Loan Deposit Scheme assists applicants get a foothold in the market earlier, then it has merit.
The key rider being, borrowers will need to demonstrate they can service the loan they are applying for.
If you are thinking about applying for a Home Loan and would like to learn more about eligibility criteria call me on 0433 210 353
