My clients Tim & Jenna have recently bought their first home. They have saved a whopping $40,000 on stamp duty and mortgage insurance due to the benefits currently on offer for first home buyers.
They bought a 2 bedroom apartment in Gymea, a beautiful suburb in the Sutherland Shire for $621,000. Stamp duty would normally be $23,435 for a property at this price. However, as they are first home buyers and buying under $650,000, they applied for the NSW First Home Buyer Assistance Scheme, and their stamp duty was waived.
They had a deposit of $70,000, however we have structured the loan so they have $20,000 left to do some renovations to the property like a new kitchen, floorboards and some painting to make it their own. They really only needed to have had $35,000 deposit, which would be 5% and costs.
Their loan was 93% of the value of the property. Usually, Lenders Mortgage Insurance (LMI) would apply as they are borrowing over 80%, but we applied for the government’s First Home Loan Deposit Scheme (FHLDS) where the government is actually guaranteeing up to 15% of the purchase price so that LMI does not apply. So that was a $16,500 saving on LMI that would otherwise have applied. They looked at getting mum and dad to go guarantor last year, but it wasn’t possible so it was great that they could benefit from the FHLDS.
All this and an interest rate starting with a 2!
Tim & Jenna are obviously thrilled to be getting into their first home and excited that they didn’t have to get a bigger loan or save for longer in order to do this. They bought a 2 bedroom unit in the suburb of their dreams and didn’t have to settle for a pokey 1 bedroom as they originally thought. I helped them at every step of the way, answering questions and negotiating with the lender we chose.
If you are thinking about buying your first home, now might be the perfect time to jump in? Get in touch if you have 5% deposit and want more information.