First Home Guarantee (FHBG)

Introduction

The First Home Guarantee (FHBG), an Australian government initiative, is designed to support first-time home buyers in entering the housing market. It’s a crucial program for those struggling with the challenge of saving for a large deposit.

It’s one of several grants and incentives available to Geelong home buyers.

Understanding the First Home Guarantee

This scheme aims to assist eligible first-home buyers to purchase a property with a substantially lower deposit, without the need for Lenders Mortgage Insurance (LMI).

Key Features

• Lower Deposit Requirement: Allows purchase with a deposit as low as 5%.
• LMI Waiver: Buyers can save on the cost of LMI, often a significant expense.
• Property Cap: Includes price thresholds for property purchases under the scheme.

Lenders Mortgage Insurance (LMI) Benefit

One of the major benefits of the First Home Guarantee is the potential to avoid the cost of Lenders Mortgage Insurance (LMI). Typically, when purchasing a home with less than a 20% deposit, buyers are required to pay LMI, which can be a substantial additional cost. However, under this scheme, eligible first-home buyers can purchase a property with as little as a 5% deposit without incurring LMI. This exemption significantly lowers the entry barrier to homeownership, making it financially more feasible for first-time buyers to purchase their homes sooner.

Eligibility Criteria

• First-Home Buyers: Specifically targeted at those purchasing their first home.
• Income and Property Caps: Criteria include income limits and property price caps, which vary depending on location and property type.
• Residence Requirement: The purchased property must be intended as the principal place of residence.

Application Process

• Participating Lenders: Applications are processed through lenders participating in the program.
• Documentation and Approval: Involves standard home loan application processes and criteria.

Conclusion

The First Home Guarantee is an empowering tool for first-time buyers in Australia, easing the path to homeownership by reducing the initial financial barrier.

For comprehensive details on the First Home Guarantee, including specific eligibility criteria, property caps, and application steps, please visit Housing Australia’s First Home Guarantee page.