Take these steps to buy your first home faster

AUSTRALIA’S relaunched First Home Loan Deposit Scheme (FHLDS) is proving popular among home buyers as record low interest rates, government incentives and lower lifestyle spending make it easier to buy property.

Lenders report thousands of the 10,000 spots released this month have already been reserved, and say many people don’t understand all the schemes and strategies that open the door to home ownership.

The deposit scheme started in January with 10,000 places, and another 10,000 became available on July 1. It allows borrowers with just a 5 per cent deposit to enter the market and avoid expensive lenders mortgage insurance charges that usually apply if people haven’t saved a 20 per cent deposit.

Beyond Bank Australia’s general manager of customer experience, Nick May, said the rush on scheme spots showed now was “a really great time to buy with so many benefits for first-home buyers currently on offer”.

“Many states also have their own local first-home buyer grants on top of the scheme,” he said.

The federal government also recently launched $25,000 HomeBuilder grants for renovators and home buyers, while the First Home

Super Saver Scheme allows people to save inside their superannuation fund.

The deposit scheme and other incentives do, however, have caps and conditions, so borrowers should do their homework.

Clancy Bennett, 37, bought his first home using the scheme earlier this year and found the process fast and easy. “I had just enough for a full deposit, but obviously every little bit helps – the other fees all add up,” he said.

Mr Bennett suggested potential first-home buyers talk to others – banks, accountants, lawyers and friends who had bought property.

Gateway Bank chief executive Lexi Airey said eligibility criteria for the FHLDS included earning no more than $125,000 as a single or $200,000 as a couple, and the purchase price being within allowed thresholds.

“It’s worth remembering that having a smaller deposit also means borrowers will pay more interest over the life of the loan,” she said. “We have found that awareness of the full spectrum of government support schemes still remains low, so we encourage first-home buyers to do their research.”