3 ways the Family Home Guarantee could help you build a home
Being a single parent doesn’t mean home ownership is out of reach. The Victorian Family Home Guarantee recognises the unique challenges faced by households supporting children and could be your ticket to getting into your own home – sooner.
What is the Victorian Family Home Guarantee? The Victorian Family Home Guarantee was introduced in 2021 and is part of the state government’s Home Guarantee Scheme (HGS). Created with families in mind, the Guarantee aims to make owning a home more affordable for single parents or legal guardians. And with 5,000 places available each financial year, it’s great news for first homebuyers or young families.
So, how can the Victorian Family Home Guarantee help you build your own home?
1. You’ll need a lower deposit
Perhaps the most appealing aspect of the Victorian Family Home Guarantee is its low deposit financing.
Under the Guarantee, you won’t need to save the usual 20% deposit of the property price to buy your new home.
Instead, the Victorian Government provides a guarantee of up to 18% of the home loan, so you only have to provide 2% so you can don’t have to part ways with all your savings.
2. You won’t need to pay Lenders Mortgage Insurance (LMI)
When your deposit is lower than 20% of the property value, you would usually have to pay LMI. With the Victorian Family Home Guarantee, you don’t.
LMI is a type of insurance that protects the lender if you can’t make your mortgage repayments. How LMI is calculated varies but it always ends up raising your loan amount and repayments each month.
Under the Victorian Family Home Guarantee, the Government takes up the burden of this insurance by guaranteeing the rest of your 20% deposit. This means you won’t have to pay LMI and makes owning your own home more affordable in the long run.
3. You’ll be more appealing to lenders
With the government guaranteeing up to 18% of the home loan, you’ll look more financially secure and appealing to lenders.
This means you might be able to access loan options that might otherwise have been out of reach.
Are you eligible for the Victorian Family Home Guarantee?
You’ll need to be a single parent of natural or adopted children to be eligible for the Victorian Family Guarantee. This includes legal guardians such as aunties/uncles or grandparents.
You’ll also need to:
- Be a permanent resident or citizen of Australia
- Meet income and property value limits
- Not currently own a property
- Be 18 years or older
- Plan to occupy the property
Think you are eligible for the Victorian Family Home Guarantee? Homebuyers Centre’s in-house Resolve Finance team can help you check your eligibility and then walk you through the application process.
Take your first step toward building your new home with one of the most affordable home builders in Melbourne and Reginal Victoria. Reach out to one of Homebuyers Centre’s friendly New Homes Consultants today.