Established in Western Australia since 1989, Government Assisted Finance offers assistance to those seeking to buy or build an owner occupied property and who can’t obtain finance through the usual channels.
Government Assisted Finance is available to first home buyers, individuals and families who need financial assistance with the purchase of their first or subsequent home.
With the deposits required from major banks and lenders (5, 10 or even 20% deposits, equating up to $80,000 for a $400,000 purchase price) proving a common and consistent barrier to home ownership for many prospective buyers, in most cases government assisted finance requires a deposit of only 2%.
Of this 2% deposit, 1% of that is required to be ‘genuine savings’, saved over a minimum of 3 months. This equates to a deposit of $8,000 on the same purchase price of $400,000.
Additionally, lenders mortgage insurance, usually charged by the main banks and other lenders, isn’t applicable to government assisted finance – in some cases saving purchasers up to $8,000 -$10,000 (depending on the overall size of deposit and loan to value).
If you are building, then its possible to only pay $50 per week towards your new loan during the construction phase, making it easier to continue paying rent or board while paying your new loan (the main banks and lenders charge full interest payments during construction).
Criteria has recently changed, with income limits (the maximum income you can earn to apply for this finance) now top $135,000 for couples or singles with dependants and the maximum purchase price has also now increased to $480k in metro areas.
Iconic Home Loans Managing Director, James Pibworth, said that government assisted finance has helped a lot of individuals, couple and families to buy a home and live the ‘Great Australian Dream’.
“As far as I am aware, nowhere else in the world can you buy or build a property with as little as 2% deposit. It’s an amazing incentive from the government to assist homebuyers who cannot traditionally obtain finance through the banks for whatever reason.”
An additional benefit for first home buyers, is the possibility to use the first home buyers grant to contribute towards the required 2% deposit and fees. With the first home buyers grant currently sitting at $10,000 for those opting to buy a block of land and build a new home, all they have to do is show genuine savings for the remaining 1% deposit. For a purchase price of $400,000 for a house and land, a first home buyer would only have to save $4,000 of demonstrated genuine savings to buy their own home.
Government assisted finance can also potentially benefit buyers with previous credit issues in the past assuming that the debt has been dealt with and there is a demonstrated pattern of positive credit behaviour. Our brokers can easily assess whether any adverse credit file will impact on borrowing.
Contact us today to discuss your options, and to see if you qualify for government assisted finance.