While the answer will very much depend on your individual situation and will take into account important factors such as financial stability and job security - here we take a look at why now could be a window of opportunity for some first home buyers.
The Government's 2020 First Home Loan Deposit Scheme
The Government’s First Home Loan Deposit Scheme allows first home buyers to pay a deposit as little as 5%, while avoiding lenders mortgage insurance (LMI). Most banks and lenders require a minimum deposit of 20% of the property’s value for the borrower to be exempt from LMI. The scheme allows first home buyers who can’t reach this threshold to take out a loan if they have saved at least 5% of the value of the property they are buying. The government will underwrite the loan so that borrowers do not have to pay LMI. Read more for further information including eligibility criteria.
Don’t qualify for the scheme? Check out the First Home Owner Grant.
First Home Owner Grants are subsidies that are set up by individual states and territories to help you buy your first home through a once-off lump sum payment. Exactly how much you will receive depends on where you are buying as each state has different rules and restrictions. You can read more about First Home Owner Grants here.
Lowest interest rates on record
It's never been cheaper to pay off a mortgage. With interest rates being the lowest on record, first home buyers can breathe a sigh of relief as lower interest rates generally mean lower home loan repayments.
It’s important to note, when it comes to choosing your home loan, interest rates are just one consideration. Which is why it pays to get expert advice in understanding what's available in the market and the benefits offered by different loan features - it could save you big time in the long run.
Buying in a coronavirus-hit market
When it comes to house hunting, both private and digital inspections may still be continuing. In light of recent government announcements and depending on your state, group inspections, open homes and in-person auctions are slowly being allowed - although they could be at a reduced capacity. Which it’s why it’s important to stay on top of the latest COVID-19 restrictions by visiting health.gov.au.
Buyers may also have more negotiating power in the coronavirus-hit market, and without taking advantage of vulnerable vendors, there may be bargains to be picked up.
It’s also important to note that due to the coronavirus environment, many lenders have reviewed their lending criteria, often taking a closer look at a borrower’s job security before approving a loan. Each lender will have a different approach to assessing your loan application. Your local Mortgage Choice broker has a thorough understanding of lender policies and this knowledge could be your best asset when it comes to securing a loan approval.
If you’re looking to get your property purchase plans back on track, your Mortgage Choice broker is a great source of up to date information when it comes to buying your first home.
If you want to get into a position to buy, organising a home loan pre-approval now could be a smart idea if you are seeking to get a clearer picture of how much you can borrow. It could also help you move quickly when you’ve found “the one”.