Saving for your first property can be a challenging and lengthy process, specifically when looking to purchase on your own. Add in a child or children, and locating a way to put aside savings for a house deposit on a single income may seem like an unattainable task.
However, if you are willing to say goodbye to renting and appreciate the security of owning, there is an opportunity. A new government initiative enables single parents to get a home loan with as little as a two per cent deposit.
As a part of the Australian Government’s efforts from July 2021 to June 2025, qualified single parents may get a home loan with a deposit as low as two per cent. This initiative will support single parents who wish to enter or re-enter the property market.
Below, we look at the steps to apply for the single parent home loan scheme.
You must be an Australian citizen of 18 years of age. Moreover, you must be a single parent with at least one dependent child.
Also, your income from the previous financial year should not surpass $125,000, excluding the child support payments.
Note: Current property owners and permanent residents are not eligible for this scheme.
National Housing Finance and Investment Corporation (NHFIC) does not directly process loan applications. Rather, you ought to apply through a participating non-bank lender or bank through one of their loan products.
Alternatively, you can apply through an authorised representative or a mortgage broker from one of those lenders.
You may purchase a house and land package, an existing house, apartment or townhouse under the single-parent home loan scheme.
NHFIC also accepts applicants to buy vacant land and a separate building contract, equivalent to the First Home Loan Deposit Scheme.
Further, your prospective house should not exceed the property price threshold specified for each state.
A conditional or pre-approval implies that the lender has consented to lend you funds to purchase your house. It is not yet a final approval. However, it indicates the property price that you can afford.
Before getting the pre-approval, it is advisable to conduct your research on the affordability of your prospective property.
At last, it is time to purchase your house. NHFIC ensures up to 18 per cent of your deposit, so you should have at least two per cent of the total property value or as mentioned in your loan agreement.
Also, you must fulfil the scheme’s owner-occupier requirements, which means you should move into the house within 6-months from the settlement date.
Whether you are a single parent or looking for better loan products, you can always connect with our experienced loan advisers for a no-obligation consultation.