Ready to turn your dreams of owning a place into reality? The First Home Guarantee Scheme is a government initiative all about helping eligible buyers get into the property market faster and with less stress. Say goodbye to hefty deposits and pesky mortgage insurance.

To sum it up, the Scheme allows you to purchase a property with a deposit as little as 5% and effectively, the Government acts kind of like your parental guarantor for the loan so you don’t have to pay lenders mortgage insurance (which is an extra annoying cost you usually have to pay if you have less than a 20% deposit).

It’s important to note that the Guarantee provided under the FHBG is not a cash payment or a deposit for a home loan. Instead, it serves as a safeguard (also known as a ‘security’) for the bank, which replaces the need for a higher deposit. Make sense?

Let’s delve deeper into the nitty gritty stuff –

1. Financial Flexibility:
   The Scheme gives you an advantage by allowing you to enter the property market sooner with a smaller deposit. Saving up a massive sum can be a real buzzkill for many young Aussies looking to own their own homes. But fear not! With the Scheme, you can rock a deposit as low as 5%, giving you more flexibility to allocate your savings and speed up your journey to homeownership.
2. Elimination of Lenders Mortgage Insurance:
   Ah, that annoying Lenders Mortgage Insurance (LMI). LMI is typically required for borrowers with a deposit of less than 20% and it can add a ton of extra costs to your loan. But guess what? If you’re an eligible home buyer, you won’t have to deal with this expense at all. Say goodbye to those extra thousands of dollars and hello to a more attainable dream of owning your own place.
3. Increased Property Market Accessibility:
   Rising property prices got you feeling down? Saving up for a massive deposit in today’s market can feel like an uphill battle. By reducing the deposit requirement and eliminating the need for LMI, this scheme opens up new opportunities to dive into the property market faster.
4. Eligibility Criteria:
   Okay, let’s talk about the fine print. To get in on the FHBG action, you need to meet certain eligibility criteria. You must be an Australian citizen or permanent resident, at least 18 years old, and plan to use the property as your main residence. Make sure to check out the NHFIC website or chat with your mortgage broker to get all the deets on the requirements and how to apply.
5. Participating Lenders:
   The Scheme works in collaboration with a network of Participating Lenders who have partnered with Government to offer the scheme. They’ve got a range of home loan products specially designed to meet the needs of first-time buyers. Make sure to do your research, connect with these Participating Lenders, and explore the options available. Better yet, if you’re working with a mortgage broker they’ll do the hard part for you.
6. Consider the drawbacks:
   Buying with a lower deposit means a higher mortgage, and therefore higher mortgage repayments and more interest costs over the life of the loan. You also might have fewer options if you need to refinance in the future. Make sure you understand these limitations before signing up!

To wrap it up, the First Home Guarantee Scheme could be your ticket to the homeownership party. Whilst buying a property with a smaller deposit does have its drawbacks, it does mean that you can get into the market sooner.