It’s safe to say that now is quite an uncommon time to be a first-time home buyer. However, for individuals whose jobs have not been affected by COVID-19, there are still a lot of opportunities out there.
We share to you the most frequently asked questions by first-time home buyers which you could learn from if you are considering buying your first home in the near future:
- Is the First Home Loan Deposit Scheme still in effect?
Many first-time home buyers have been saving for their down payment for the last 5-10 years, hoping to reach the magic 20% mark and avoid paying Lenders Mortgage Insurance (LMI).
However, for first-time home buyers, a new path has begun allowing eligible first-time buyers to purchase a home. Places in the scheme, which began on January 1, are still available and can allow qualifying first-time buyers to buy a home with just a 5% deposit and avoid paying LMI.
We can walk you through the process if you are interested. Book a call
- Is it now difficult to get a first home loan than in recent months?
This will be determined by your unique circumstances and how much the coronavirus has impacted your household’s financial status. Interestingly, the latest Australian Bureau of Statistics data shows that getting a loan for a first home buyer was no more difficult in February than it had been in the previous few months.
Indeed, home loans for owner-occupied first-time purchasers grew by 0.4 percent over the month.
However, COVID-19 did not have a significant influence on the Australian economy until March, so we’ll continue to watch the data for you in the months ahead.
- I heard a certain insurance company is no longer insuring loans in troubled industries. Is this true?
While a certain insurance company has temporarily halted the provision of LMI to some new mortgage borrowers, including those employed in the hospitality, tourism, gyms, and beauty salons, the good news is that Australia’s other major LMI supplier, has no intentions to change its stance on LMI, noting that it relied on lenders to follow responsible lending criteria and review applications based on criteria and good standing.
Also, remember that the reason why First Home Loan Deposit Scheme (FHLDS) was launched is that you don’t have to pay LMI if you’re getting your first house loan through it, so that’s another reason to apply.
- Are lenders looking for stable proof of income?
In the present COVID-19 environment, it’s safe to assume that lenders will scrutinize your income and want solid evidence that it will be stable.
For people working in critical services or work that has high demand even in the pandemic, this shouldn’t be too much of a problem.
Others in less coronavirus-resistant industries, on the other hand, may have a harder time proving their revenue is constant.
Some lenders, for example, will no longer accept bonus income from borrowers who do not work in critical services unless their company can provide a statement stating that the bonus would be paid out at the present rate.
The best way to find out is to schedule a call so we can assess your scenario and assess any potential problems ahead of time. Book A Call
- According to what I’ve heard, valuations are coming in lower than the contract price?
There’s no shortage of recent stories about appraisals coming in lower than the contract price, and some off-the-plan buyers are finding it difficult to close the gap.
So, if you’re a first-time buyer concerned about a reduced valuation, please contact us. We may go over the various options open to you to make up the difference, including using the FHLDS (mentioned above).
Buying your first house is stressful enough at the best of circumstances, but it’s even more so during a period of uncertainty and rapid change. But don’t worry, we’ve got things under control.
So do get in touch if you’d like us to assist you in exploring your options and securing a competitive home loan – we’re ready to swing into action and make it happen for you.
Get in touch with us.