Thinking of building a home here in Perth but haven’t saved enough yet to qualify for a mortgage? The good news is that with Western Australia’s First Home Buyers Grant (FHOG), you can start building your home sooner than you think. Currently capped at $10,000, the FHOG can go a long way towards helping you pay for a home loan deposit, which is generally set at 5% of the total home loan. Note that only one grant is available per contract regardless of how many individuals own the property.
Qualifying for the Grant
The state government administers the First Home Buyers Grant through authorised banks and lending companies. When applying for a home loan, your bank or lender will first assess your financial capability, taking into account various factors such as your age, work, and any existing rental income, credit history, and current debts, in addition to the property’s value, and the deposit amount you can afford. In line with these considerations, your lender will also test your eligibility for the grant and guide you through the entire application process if you are indeed qualified.
In terms of payment, the grant is usually approved as soon as you’ve sealed the deal with an approved building contractor and is typically paid directly to your mortgage lender. If you are able to pay the full deposit amount prior to construction, the grant will instead form part of your repayment and will be released once your lender issues the first schedule. The First Home Buyers Grant is non-taxable, so you can rest assured that your lender receives the amount as is.
While many builders require their clients to find their own mortgage lender, innovative builders such as Perth-based BuzzHomes can help arrange for your home’s financing as part of their house and land packages. These companies will determine first how much you can borrow and whether you can qualify for the First Home Buyers Grant. Once the estimate is clear, they will then proceed to help you find a good location and present you high-quality home designs that suit your budget.
First Home Owners Grant, TimeFinance.com.au
First home owners grant, YourMortgage.com.au