For those wondering if a single parent home loan scheme actually exists, the arrival of the Family Home Guarantee is set to be nothing short of revolutionary.
Did you know that there are currently over one million sole parent families in Australia? While this figure represents roughly 15% of all households, almost 80% of these families are disproportionately being raised by single mothers.
Amongst other things, single mums are on the backfoot when it comes to purchasing property. A recent analysis conducted by Finder revealed on average, men retire with 26% more super than women. To make up for this discrepancy, the average woman would have to supplement an extra $236 per month into their super, or alternatively work for an extra eleven years.
In addition, women are likely to have less money in savings. With $38, 932, the average man has 83% more money in savings than the average woman – a difference that has increased from 71% just twelve months ago. It’s figures like these that have no doubt spurred the Federal Government into action, and although the Family Home Guarantee isn’t exclusive to women, they are the demographic that will arguably benefit the most from it.
How The Family Home Guarantee Works
Although the concept of a single parent home loan scheme may have once sounded absurd, the introduction of the Family Home Guarantee is set to bridge the gap between those who may have completely written off the prospect of property ownership.
The newly introduced Family Home Guarantee will allow eligible participants to build or purchase an existing home with a deposit of as little as 2%, and isn’t restricted to first home buyers. In order for applicants to avoid paying Lenders Mortgage Insurance, the government essentially acts as a ‘guarantor’ to back the remaining percentage of the deposit, which can be as high as 18%.
For a $500, 000 property, what this single parent home loan scheme means is that sole parent families can purchase property with as little as $10, 000. While 10, 000 Family Home Guarantees will be made available over four financial years from 1 July 2021 to 30 June 2025 – or 2,500 spots per year – applicants will still need to prove their ability to comfortably pay back a mortgage on their own and to meet the criteria of individual lending providers.
To qualify for the Family Home Guarantee, the key criteria that applicants need to meet is that they must be a single parent with at least one dependent child, and must have a taxable income that does not exceed $125, 000 per annum for the previous financial year. For a property to be eligible under the Family Home Guarantee, it must be a residential property. This term has a particular meaning, and is consistent with the First Home Loan Deposit Scheme.
For single mums and dads exploring their options for purchasing property, it’s important to get the right advice instead of making big decisions based on guesswork. A savvy mortgage broker has an in-depth knowledge not just of financial products, but can also give valuable guidance on whether an applicant is eligible for other government grants or funding as well.
As of September 2021, mortgage brokers wrote 67% of all residential home loans in Australia – the highest number ever recorded. What’s more is that 90% of these customers reported that they were happy with the services provided to them. If you’re thinking about applying for your first mortgage, then it’s worth getting in touch with the professionals.
Partnering With Home Loan Professionals
Navigating the complex world of home loans has long been regarded as stressful, frustrating and time consuming – but if you can find the right advice on sourcing how mortgages work, then the good news is that it doesn’t have to be.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 2,000 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.