The Australian government offers numerous schemes to its eligible people. When it comes to home loans for single parents, government facilitates them with a single parent home loan scheme in Australia. This scheme is also known as Family Home Guarantee. It allows single parents with at least one dependent child to buy their first home with small deposits. By acting as a guarantor, the government will allow single parents to purchase home faster while avoiding the LMI cost that usually applies to those who have a low deposit. In today’s blog, we’ll discuss everything about the family home guarantee.
What is Government’s Single Parent Home Loan Scheme?
Under the Family Home Guarantee scheme, a single parent with at least one dependent child can buy a home with as little as 2% of the property value, without paying LMI. Basically, LMI is charged when an individual has a deposit of less than 20%. However, in this scheme, if an eligible single parent pays a 2% deposit, the government will guarantee 18% of the loan. As a result, borrowers don’t need to pay LMI. If you don’t know how to access this grant, you can seek help from a reliable broker.
Single parent home loan scheme by government is available through 30 June 2025. From 1 July 2022 to June 30, 2025, there are 5,000 places available for each financial year to qualify single parents with dependents. Therefore, make sure you meet the eligibility criteria to get the benefit of this government scheme.
Who Can Apply for the Family Home Guarantee?
Eligible single parents can apply for this scheme and save thousands of dollars. To meet the eligibility criteria for the family home guarantee, a single parent must:
- Hold Australian citizenship with dependent children.
- Have an annual income of $125,000 or less.
- This scheme is not only for first-time home buyers. You can be an owner-occupier.
- As little as a 2% deposit of the property value is required.
- Be 18 years old or above.
This scheme is not only available for first-time home buyers. However, single parents can still qualify for the government’s single parent home loan scheme even if they’ve owned a home previously.
Top Tips for Single Parents Applying for Family Home Guarantee
The following are a few tips that you can follow before you apply for single parent home loan scheme:
- Do your research
Make sure to research home loan and real estate markets. Firstly, try to research current property market prices so you can have an idea of how much you need to borrow. Secondly, research the home loan market and how much you can afford to borrow.
- Save for a deposit
Your chances of getting approved will be increased if you have the required deposit. Although, you need only a 2% deposit if you are eligible for the single parent home loan scheme.
- Go through your purchase fees
You can better prepare for your finances if you know the costs that come with purchasing a home. For instance, consider the cost of property valuation, loan application, conveyancing and pest inspection. If you are not ready for these costs, you may find difficulty managing your budget. Additionally, other fees might include stamp duty, ongoing fees, and legal and transfer fees.
- Be ready before you apply
To avoid having your home loan rejected, it is important to check if you can meet the income needs to get your home loan approved. Ensure you have a good credit score to maximise your chances of getting approved. You can have a good credit score if you pay all your bills on time. It includes rent, electricity accounts, credit cards, and mobile phone plans.
- Get a pre-approved home loan
Pre-approval can help you avoid wasting your valuable time looking at properties that you can’t afford.
Conclusion
If you are a single parent and looking to buy a home for a better future for your dependent child or children, then you can access a single parent home loan scheme. Eligibility requirements have been mentioned in this blog. You can seek help from Home Star Home Loan to get approved for a home loan faster.
Other Useful Blogs
1) Refinance Home Loan Broker
