Call out to single parents – break into the property market!
When marriages break down, the family home is often sold in order to distribute the assets purchased together. If this happened to you, you may have been wondering how to find a 20% deposit to get back onto the property ladder? Here’s a great new government scheme to address this very issue.
The Family Home Guarantee Scheme, a Federal Government initiative due to kick off on 1st July 2023, allows single parents to take out a home loan with a deposit of as little as 2%!
Under the scheme, up to 18% of a single parent’s home loan can be guaranteed by the government. This will bring your total deposit to 20%, which also negates the need for Lenders’ Mortgage Insurance which is payable on home loans with deposits of less than 20%, saving even more money.
Unlike the First Home Guarantee which requires a minimum of 5% deposit, single parents will be able to get a mortgage with a 2% deposit. Of course, when buying a property there are additional costs involved than just paying the deposit and your broker will provide you with an estimate on what costs to expect.
5,000 places are available per financial year (until 30 June 2025) to eligible single parents who are looking to build a new home or purchase an existing home. We are expecting it to be popular, especially with the current pressure on the rental market and rising rents.
What you need to know
- You need to be a single parent with at least one dependent. You will need to demonstrate that as a single parent you are legally responsible for the day-to-day care, welfare and development of your child.
- Natural or adoptive parents has now expanded to include a grandparent, aunt or uncle who also demonstrates legal responsibility.
- Are an Australian citizen or Permanent Resident, at least 18 years of age.
- With an annual taxable income of $125,000 or less for the previous financial year (Child support payments are not included as income for the purpose of the income cap).
- As a single parent, you must be the sole applicant listed on the loan and certificate of title.
- You must live in the property you intend to purchase.
- You can be a previous home owner, but can’t own a home at the time of applying for the scheme. You will also not be eligible if you currently own a commercial property, investment property, own land or a company title interest in land in Australia.
- Must be divorced if married (separation not included) and not in a de facto relationship.
- WA property price cap in the city is $600,00 and $450,000 for regional.
If you do not qualify for the scheme there are other ways to help you still get your foot in the property market. Contact Sarah Chambers, Finance Broker at our partner Lendable to help you break into the property market now!
Lending services provided by Finex Corporation Pty Ltd T/As Lendable. Corporate Credit Representative 526960 of Australian Credit Licence 410232 / ACN 080 877 498
