03 Jun Home Loans for Single Parents
It’s never easy to get onto the property ladder and that is especially true for single parents who are normally trying to balance their children and work.
Fortunately, there’s a new Government program aimed at assisting single parents to buy a property, that has been announced as a part of the 2021 Federal Budget.
Known as The Family Home Guarantee, the new program aims to assist 10,000 get into a property over the next four years with as little as a 2% deposit.
On the surface, this is a really good program with huge social benefits, however, it is vital that you speak to a mortgage broker in Melbourne because there are some details that you will need to consider.
Essentially The Family Home Guarantee works a lot like the very popular First Home Loan Deposit Scheme. The one major difference is that you don’t need to be a first home buyer to qualify.
Oftentimes single parents might have previously owned a property and they simply need some assistance getting over those initial hurdles.
Traditionally, if you’re a home buyer and you are not able to come up with a 20% deposit, you’re likely to be required to pay Lenders Mortgage Insurance (LMI), which can be a significant sum of money. Oftentimes tens of thousands of dollars.
For single parents, getting a deposit together is normally the hardest part of buying a home, particularly in places such as Melbourne, where house prices can be very high.
Under the scheme, the Federal Government effectively acts as a guarantor for the deposit shortfall. A lot like the way a guarantor loan works with a family member putting up the equity in their home to help a first home buyer.
To be eligible for the program, you need to be a single parent earning less than $125,000 per year. It allows you to buy either a new or established home, or build your own.
It’s important to speak to a mortgage broker in Melbourne because you will need to apply for the scheme through the National Housing Finance and Investment Corporation (NHFIC). The program is offered through a range of different lenders, much like the FDHLS and your mortgage broker can help you find the best option.
Importantly, you will still need to be able to service your home loan, which is based on your typical normal income and expenditure.
Given that it is possible to apply for the scheme with only a 2% deposit, which means you would be buying a home with a 98% LVR, means there are still some risk for you to consider and being able to comfortably service the debt is very important.
However, given the fact that this program is going to be able to help thousands of single parents purchase a home that they otherwise wouldn’t have been able to, makes this an incredibly appealing proposition for many.
Be sure to speak to a mortgage broker in Melbourne, to see if you qualify for The Family Home Guarantee.
The Family Home Guarantee has only been recently announced as part of the 2021 Federal Budget. Be sure to register your interest with Aspirus Financial and as more details of the scheme are released we’ll keep you informed as to how you need to proceed.