Business, finance, savings, real estate manager or mortgage loan concept: flat lay or top view of wooden house model and coins scattered from glass on open blank notebook paper
This year’s budget was a bonus for homebuyers with a range of measures aimed at helping Australians get their own property. But as the old saying goes: “God helps those who help themselves!”
And even with government help, potential homeowners still need to save a large amount in order to receive a down payment. Currently, there are still many lenders willing to hit an 80:20 deal in which the borrower has to raise 20 percent of the loan for 80 percent of the purchase price.
So if you’re buying a $ 800,000 home, you’ll need $ 160,000 as a security deposit. Because of this, Mom and Dad’s Bank is the 10th largest mortgage lender / lender in the country!
“Parental contributions averaged more than $ 89,000, according to an analysis by researcher Digital Finance Analytics, an increase of nearly 20 percent in the last 12 months, and enough for a 20 percent deposit in most of the country’s zip codes outside of Melbourne and Sydney (DFA) ”, the AFR informed us in March of this year.
There are 3 things the youngest budget has offered home buyers, but are they enough?
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The government will extend the start of construction requirement under the existing HomeBuilder program from the current six to 18 months.
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Another 10,000 places are made available in the First Home Loan Deposit Scheme (FHLDS) or “New Home Guarantee”, a system that enables first-time buyers / builders to purchase more than 80 percent of the property’s value with just 5. to borrow% down payment without paying the lender’s mortgage insurance.
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Other initiatives include setting up a Family Home Guarantee Scheme, a program similar to the FHLDS mentioned above that allows eligible single parents with dependents to enter or re-enter the housing market with just a 2 percent down payment.
So how do borrowers save the rest? For fixed deposits with less than 1 percent interest?
The answer is super simple – use your super to save!
All home savers should consider using the First Home Super Saver Scheme, which has been modified so that someone can save $ 50,000 in their super fund and then withdraw it plus income. It was only $ 30,000, but the change means a couple could end up accessing $ 100,000 of their savings from their super for one deposit.
The story goes on
There are a couple of little problems you need to understand, and here they are:
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You cannot use the super that your boss pays in at a reduced rate as part of the super guarantee contribution, which amounts to 10 percent of your salary from July 1st.
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There is a limit of $ 15,000 per year that you can toss in your super, but that could change if politicians vote on it and so it could be increased.
Why is super the best way to build your wealth on a deposit? Well, good super funds bring back 7-8 percent a year, and some do even better, so it will boost your savings.
And who knows, it might prevent your mum and dad from being bankers.
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