Dan and Pauline, two hopeful first-home buyers, embarked on their home-buying journey in August 2022. They were eager to explore the possibilities offered by the First Home Loan Deposit Scheme. However, they soon discovered that the scheme was exclusively available to Australian citizens, and as permanent residents, they initially didn’t meet the criteria.
But in April 2023, the Australian Federal government made an important announcement to address the ongoing housing affordability crisis. They decided to expand the criteria of the Home Guarantee Scheme, and it was music to Dan and Pauline’s ears. Now, permanent residents like them are also eligible for the scheme.
Once the news reached us, we immediately got in touch with the couple to share the exciting update. We arranged an assessment to ensure that they met all the requirements. The scheme dictated that their combined income, as a couple, should not exceed $200,000, and there was a price cap on the properties they could consider. Since they were eyeing homes in Sydney, the price limit was $900,000, and they were also pleased to hear that the NSW government had recently increased the stamp duty exemption to $800,000 in June 2023.
After our initial assessment, we found that Dan and Pauline could potentially borrow up to $700,000. With this in mind, they set out on their house-hunting adventure, aiming to take full advantage of the scheme. However, the reality of the Sydney housing market soon hit home. Bidding wars and higher offers from other buyers consistently outpaced their efforts.
Thankfully, they had $100,000 in savings, which was a significant asset. They returned to us to explore the possibility of purchasing a home for around $800,000, increasing their chances of securing their dream property. Upon reviewing their financial situation, we confirmed that they could handle an $800,000 purchase. With a preapproval of $700,000, $100,000 in savings, and the added perk of stamp duty exemption for first home buyers, they were well-prepared for this next step.
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As the couple embarked on their search, they finally discovered a house that ticked all their boxes. There was just one minor hiccup. The current owners had converted the garage into an extra room. Naturally, we wanted to ensure that this modification was acceptable as security for their home loan. We reached out to the bank, seeking clarification. Fortunately, the bank’s response was reassuring. As long as the property had a single title, they were more than willing to accept it as collateral, paving the way for Dan and Pauline’s dream of homeownership.
In their quest for their first home, Dan and Pauline demonstrated perseverance, adaptability, and a sound understanding of the financial strategies available to them. Their journey stands as a testament to the possibilities opened up by government initiatives to make homeownership more attainable for Australians.
Maria Papa is a senior property and finance expert specializing in home loans, investment loans, self-employed loans, alt doc loans, car loans, personal loans, and loan protection. She has offices in Sydney, Melbourne, and Manila. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au
Disclaimer: Your full financial situation will need to be reviewed prior to acceptance of any offer or product.