Buying your first home is one of the most important financial decisions you’ll ever make.
After all, it’s probably the biggest purchase you’ll ever make.
From new schemes to help with the deposit, to attractive interest rates and other extra incentives, it’s a good time to try and tap into the housing market.
Here are 10 things you need to know if you’re in the market to buy – or perhaps build – your own home in 2020.
1. There’s a new scheme available for first-home buyers.
From January 1, 2020, there’s a helpful new scheme available for first-home buyers. The new federal First Home Loan Deposit Scheme allows eligible first-home buyers (who meet a specific criteria) to take out a mortgage by providing just a five per cent deposit.
As most banks usually require a 20 per cent deposit, the scheme will allow first-home buyers to secure a home faster.
The new scheme also means that approved first-home buyers can avoid paying lenders mortgage insurance (LMI), which can cost thousands.
2. The First Home Owner Grant.
Besides the First Home Loan Deposit Scheme, there are some other avenues available which assist first-home buyers.
The First Home Owner Grant, which was introduced in 2000, offsets the effect of GST on owning a home.
Although the scheme, which can be worth up to $20,000, is available nationwide, the amount offered to those buying a home varies between states and territories. (You can find out more about the First Home Owner Grant here.)
3. Keep a close eye on interest rates.
In October 2019, the Reserve Bank of Australia cut official interest rates to a record low 0.75 per cent. Thanks to the significant cut to interest rates, many banks are now offering low home loan rates.
To figure out the best time to buy, it’s super important to keep a close eye on interest rates – and compare your options.
4. Stamp duty exemptions.
For some first-home buyers, a stamp duty exemption may be available.
A partial or full exemption can lower the tax you pay when purchasing your property, which considerably cuts costs.
Much like the First Home Owner Grant, however, the rules vary between states and territories.
In New South Wales, for example, first-time homeowners are exempt from stamp duty if the value of the home is under $650,000.
5. Look into new communities.
When searching for the right area for you, consider looking into new communities or visiting display homes for off-the-plan properties.
After all, when you buy your first home, you also buy into your very first community. Lendlease is building new communities in most states, with new facilities like parks, community centres, shopping centres and also land, if you’re looking to build. Building brand new can give you the freedom you want to create a ‘forever home’ that’s part of a growing community.