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This podcast is for education and entertainment purposes. It's not financial advice and doesn't take into account your objectives, financial situation or needs. You should consider if the information in this podcast is appropriate for you and contact a professional financial adviser. If you are seeking financial advice.
Alan: Hello and welcome back to the Teachers Mutual Bank Bringing It Home podcast series, where we take you through the home buying process step by step from getting home loan ready to the home loan application process right through to home sweet home.
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Alan: I'm Alan Waugh from Teachers Mutual Bank. And joining me again today is financial wellness and certified money coach Betsy Westcott. Betsy's greatest wish is that every Australian enjoys financial well-being. Across her extensive career in financial services, Betsy has helped hundreds of people to realise their dream of becoming home owners and investors. Hello and welcome back, Betsy. Hi, Alan. Good to see you again.
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Alan: Before we get started, we want to acknowledge the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their elders past and present, and extend their respects to all Aboriginal and Torres Strait Islander peoples today. Now onto today we're taking a look at the help that's available for our first home buyers and we do have quite a bit of support available in Australia for first time buyers wanting to get into that property market.
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Alan: But it can be a minefield.
Betsy: Yeah, that's right. And we do have lots of help available, which is great because it can, as we know, be really hard to get your foot in the market and save that 20% deposit. But considering as well that you also have to save on top of that deposit government fees and taxes like stamp duty or with a lower deposit, you might also have to pay lender's mortgage insurance and property prices.
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Betsy: As we've seen over the last few years, they can rise faster than you can actually keep up with your savings. Yeah, and that's especially true if you might just be starting out in your career or if you're on a fixed income, for example, for teachers, especially if you're working casually or on a contract basis, saving for your first home can be really tough.
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Betsy: But even if you're in a permanent position of saving that 20% deposit on a teacher's salary as property prices continue to rise, that can be really tough too. So knowing what help there is and what help is available in terms of government schemes and grants can be a big part of making those first home buyer dreams come true.
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Alan: Look, I'm really looking forward to this one, so we can jump straight into it then.
Betsy: Yeah, let's do it.
Alan: Okay. Let's start with a quick rundown of the kind of help that's out there for the first time buyers.
Betsy: Yeah. So help for first time buyers is available via various federal and state government schemes, grants and exemptions. And these can help you buy your first home sooner and with a lower deposit.
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Betsy: So I would say for listeners, you might want to jot down the names of programs or websites that come up. And so I would say have your notes, app or pen and paper ready to go.
Alan: Alright, so what I'm hearing is a lower deposit and get you into your first home sooner. I'm thinking that's exactly what our listeners are looking for.
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Betsy: That's about right. So for example, there's federal government schemes which get help guarantee loans for first home buyers, which means they can enter the market with a much lower deposit and without having to pay that lender's mortgage insurance because the government acting as a as a guarantor on your loan. And this can make a really big difference for our first home buyer and their ability to buy a home.
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Alan: So, you mentioned basically a couple of schemes that are on offer and there are some eligibility rules around all those. Can you give us a little bit more insight into that?
Betsy: Yeah. So depending on the scheme, they'll all have slightly different eligibility criteria that applies. So for example, it could be there's a price cap on the property you can purchase under the scheme as well as rules around the purpose.
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Betsy: So you must be an owner occupier rather than having the intention to rent it out as an investment property. So an example of a current scheme is the Home guarantee scheme, which is administered by the National Housing Finance and Investment Corporation and actually one of the current assistant programs that they offer is the first home guarantee. It allows eligible singles or couples who are first home buyers to buy a home with as little as 5% deposit and no lenders mortgage insurance, so it can be used to build or buy a new home or an existing home.
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Betsy: And then in addition to that, there's also something called the Family Home Guarantee Scheme. This one is eligible for single parents with at least one dependent and with the family home guarantee it can be used for your first or your next time.
Alan: Well, that sounds like a good help to a lot of people, but what other eligibility criteria might our listeners need to be aware of for these sort of guarantee schemes?
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Alan: So on top of the eligibility criteria related to the types of property that you can purchase, applicant eligibility criteria typically apply to the schemes too, such as your age. There's income criteria or for example, for schemes that support regional first time buyers, like the current regional first time buyer scheme, applicants would need to live in a regional area.
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Betsy: So it's important to point out that these schemes don't have an unlimited number of places available either. Exactly. So the Federal government schemes typically have a very limited number of places nationwide and you can actually only access them via approved lenders to.
Alan: Yeah, that's right. So it's not all banks.
Betsy: That's right. Only select lenders. And of course teachers Mutual Bank is one of those select few approved by the National Housing Finance and Investment Commission to provide home loans under the current home Guarantee scheme, which is kind of pretty special.
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Alan: I'll look at something, Betsy, that we're really proud of and we've got a lot more information available on our website about the current schemes for eligible first time mothers as well. So let's just make sure you get your hands on those resources on our website.
Betsy: And it's important to remember that schemes and eligibility requirements can change from year to year.
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Betsy: So make sure you check the relevant federal government websites. And this is a bit of a mouthful, but I'm going to say it for you. The National Housing Finance and Investment Corporation website for the most up to date information on first home buyer schemes and assistant programs.
Alan:Yeah, and that's as in .gov.au
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Betsy: For listeners wanting to make a note of that so they can go on and do their own research.
Alan: So Betsy, we've talked about the sort of first time buyer help that's on offer from the federal government, which is, which is fantastic. Let's take a look at help that's available for first home, buy it from state and territory governments as well.
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Betsy: Yeah, So more localised help. Sounds good. Alan. So now, listeners, I would like you to take note of this URL ready www.firsthome.gov.au. Now you can check this as well as visiting your state and territory government websites to understand what current assistance is available. So basically every state and territory has different grants and help available to first time buyers as well as stamp duty grants and exemptions, which again will differ from state to state and state government programs such as the Queensland First Home Owners Grant that's eligible for first home buyers, owner occupiers and they can get $15,000 towards buying or building a new house unit or
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Betsy: townhouse as long as it's valued at less than $750,000. So there's a lot of help out there for first time buyers, so much so that it can actually kind of be hard to know where to start. The great news is you'll lending specialist can help explain the different government grants and schemes available and then also help you and guide you on your eligibility.
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Betsy: And in some cases they can even help you complete the applications as well.
Alan: They certainly can. But so let's talk now about stamp duty exemptions. So what the first time buyers need to know there.
Betsy: So stamp duty differs from state to state and so to the grant and exemptions available for first time buyers, both in terms of the type of grant or exemption and the amount.
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Betsy: And there will be different eligibility criteria or caps that might apply to depending on which state or territory you live in. So just a reminder to check out www.firsthome.gov.au today. Here for the latest on the state and territory first time by help
Alan: and for our listeners, there's a stamp duty calculator on our website that can help you work out how much stamp duty you could save if you qualify for exemption under one of those grants.
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Alan: So make sure you check that out.
Betsy: Great tip.
Alan: And unfortunately, we're almost out of time. So since we're in tip mode, Betsy, can we wrap things up with your top tips for first time buyers?
Betsy: Absolutely. Well, obviously, the biggest tip is to make the most out of the government help that's on offer. Make sure you stay up to date on grants as they change both at a federal level and a state level.
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Betsy: And we mentioned it in the last episode, but don't forget to download the first time buyer's guide from the website. It's really useful as a resource for first home buyers and a great companion guide to our podcast to.
Alan: This can be a really tricky area for first time buyers. So some fantastic tips there. Thank you again for joining us, Betsy and thank you listeners for joining us too.
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Alan: We hope you enjoyed today's episode of Bringing It Home podcast. Make sure you tune into episode three when Betsy steps us through the home application process. And remember, if you have any questions about the home buying process or anything we talked about today and what do you want to speak to one of our lending specialists? Please give us a call.
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Alan: We'll make a booking to speak to a lending specialist at a time and a place that suits you, including after hours at your place of work, at home, or even by video. And I'm looking forward to catching you next on.
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