Home Loan Assistance
Purchasing a home is a dream of many people across the country. If you are a low-income earner, you may think that this is one dream that is virtually impossible to attain, but nothing could be further from the truth. Between governmental support programs, and a variety of home loan options, low-income earners can make their home ownership dream come true.
It will take a commitment to take control of your finances and some careful planning, but it can be accomplished. The pathway to home ownership while on a low income may be a bit different to the traditional process of going to a bank and applying for a home loan, but it is still possible.
Below is a look at several things low-income earners can do to make home ownership become a reality.
Get Credit Report in Order
When you apply for a mortgage to purchase a new home, one of the first things the lender will check is your credit report. It is important that your credit report shows that you make your payments on time and that you do not have a lot of outstanding debt. To get a clear picture of what your credit report looks like, you should request a copy of your current credit report. Look over your report for any error and contact the credit reporting agency to fix those errors as soon as possible.
If you have any outstanding debts listed on your credit report, it is important that you contact the lender or company you owe money to and set up a payment agreement. If you are in the habit of paying your bills late, you may want to sign up for direct bill pay that will automatically on time, every time. Now, is the time to start repairing your credit report, so it will look good when you apply for a home mortgage. Depending on your current score, it could take several years to repair, so start early.
Australian First Home Owner Grant (FHOG)
The First Home Owner Grant program began in 2000, and is offered throughout the country. However, each state and territory has its own program, types of grants available, and eligibility requirements. This grants are paid in a one-lump sum and do not typically need to be repaid. You can expect to receive a grant from anywhere from $5,000 to $25,000 depending on your specific circumstances, where you live, and where you are moving to. The program includes standard grants, relocation grants, and various concessions, such as stamp duty exemptions.
Shared Home Ownership
If you are a low-income earner, one solution to home ownership may be through the Shared Home Ownership program. With this program, the government will actually purchase part of the home with you. The government may invest up to 30 percent of the total cost of the home. This will lower your financial obligation and make it easier for you to qualify for a loan. At some point in the future, you will have the ability to buy the remaining portion from the government, so you can own the house in full. If you decide to sell the house in the future, the government would reclaim their share of the sale.
These methods may be able to help you realise your dream of owning a home. The first step is to start saving as much money as possible to use towards a down payment, and to improve your credit report. When you are ready to purchase a home, check around at several banks, credit unions, and home lending agencies to see who will provide the best solutions for you. If you are initially denied for a home loan, it is a good idea to seek advice from a financial counsellor to fix your credit score to the point where you will be eligible for a home mortgage.
Looking to by new home .I wanted to borrow 450,000 can you tell me the repayment please.
Hi Alefosio,
The repayments will depend on how much deposit you have and the interest rate you receive, among other things. Try using the moneysmart.gov mortgage calculator to get and idea of repayments.
Regards,
LILA
I would like to know if its possible to assist with the refinance of a family home whereby the company providing the finance would actually purchase 49% of the property without any repayment and receive their share (49%) at the demise of the individual owners or at the repayment of the 49% plus extras.
Hi Peter,
It looks like you might be after a reverse mortgage, try contacting a mortgage broker as they have access to hundreds of home loan products across numerous lenders. They would be in the best position in letting you know what is available.
Regards,
LILA
I’m a widowed mum of a toddler receiving the sole parent pension. I have 60k and I’m wondering if I qualify for a home loan while unemployed..
Hi Wendy,
It is highly unlikely you would qualify with any lender in less you had some form of cash flow outside of benefits. Try speaking to a free financial counsellour to see if they may be able to provide more detail.
Regards,
LILA
Hi Wendy, I have an almost identical financial situation. I’ve worked out that I could easily afford a place around $300,000 (and there are a fair few out there depending on where you want to live). The repayments are much cheaper than what I am paying in rent currently- even taking into account losing rent assistance and the added expenses like insurance, rates and repairs- I’d still be paying less than what I pay in rent. I suppose interest rates might go up eventually, but by that time my youngest will probably be in school and I’ll be working. I’d be getting a few years fixed rate anyway. I’ll be hunting around at the end of the year- if you do end up getting approved for a home loan with someone I’d love to know who! 🙂 All the best!
Hi,
Just wondering if you found a place that accepted you for a home loan whilst on parenting payment, unemployed?
Would love to know thanks!
hi there,
i want to refinance this home buy it off from my brother and currently i am unemployed .
what will be the interest rate will be if we go with you .
regards
Hi Badal,
We are not a lender, we provide information on different low income loan options. It might be hard for you to obtain financing while unemployed, try speaking to a mortgage broker as they may be able to provide you with more information.
Regards
I would like to know how to find the government help that you mentioned to help with 30 percent?
Hi Julie,
You can find more information by contact or visiting Keystart shared home.
Regards,
LILA
Hi Lola
Just followed the link to key start home loans and I noticed it seems almost solely for western Australians is there something like this for nsw tenants?
Thanks for help
Hi Adam,
We are unaware of any programs at this time as they do come and go based on governments. Try speaking to a free financial counselor who may know of programs in your immediate area.
Regards,
Can anyone answer the following for me – I’m after the name or title occupation of the people who act as go-betweens when you purchase a house and the owner lends you the deposit.
It was explained to me like this: A house worth $220k is sold to a low income family. The owner lends the buyers’ the deposit (eg 10% = $22k) with a separate contract to repay that in the first Xyrs (maybe 4 or 5yrs). The buyer then is borrowing 90% LVR, getting a better rate. The go-betweeners’ arrange the contract for the deposit and assist in finding a lender. Does anyone know what this group of people are called (either business name or occupation)? Mortgage Brokers haven’t been able to point me in the right direction, nor have Financial Counsellors…??
Hi Colin, We to are unfamiliar with this type of service – possibly do a few search queries like “home owner lends deposit to purchaser” online to see what pops up.
Good Luck
Hi I am a single mum with two boys. I currently own my own mobile home in a caravan park. I was wondering if its possible to sell this house and buy a bigger house as we need more space. Im on newstart and working partime. Would this be possible???
Thankyou
hi my mum and dad own thirds of a house through the departure of my grand father and are wanting to bye the other shares of the home out but are only able to borrow 90,000 from the bank there on pensions and i was just wondering if they would be able to get help with the part owner ship scheme through the government thankyou for time your sincerely kim.
Hi. I am recently divorced. Work full-time with 2 dependent kids at home soon to be one as he is off to work at the end of the year. I get a little from family allowance for my youngest. To get my ex’s name off the house I have to refinance the home loan. I’m worried they will knock me back as a single parent. What is the best option to go for I don’t really want to sell up. Current loan is about $213,000 property valued around $300,000.
Hi, I am on a full disability pension in NSW and am looking to a home. I have seen house prices go far too high where I live and am paying far more than the repayments would cost me in rent. I have a pretty good deposit, but one of my disabilities is focus and filling out forms etc. Would I be able to get a home loan for the current prices they are asking for homes and or land?
Hello, my wife & I are both on pensions, her Disability (she has also previously had a home loan), me Carers, no debt of any kind, no credit cards, renting a rural property at the moment.
We wish to borrow $200,000.00, as there are quite a few rural properties that we are interested in buying.
We have 5% deposit, will any lender be willing to help us out?
I sold my Home and I am short $135.000 for buying a $600,000 home ‘ I am on disability and repayment are appox $310.00 a fortnight ‘ I was going to have family go on the loan but would I get this loan having the Government on the loan as well.
Hi my daughter is 20 on a low income saving most of her wage she has saved thirty thousand in the next five years will have one hundred and fifty thousand. By then will be on about 600 to 700 a week. Can she get a loan on a single income and can she use us as an increased income as we would have us living with her paying her 250 a week. She has no debt no credit cards owns her own car has a regular savings of 300 going into the bank for the last two years which she doesn’t touch.
Any help would be appreciated as people have told her it will never happen
Hi, I currently have 4 casual jobs and receive benefits and have 4 kids, I have a guarantor but no deposit and I would like yo borrow $200k anywhere to get assistance? My rent is more than what my repayments would be.
Can you please tell how you can me save for a home loan please has i miss having my own home
THANK YOU
TRACEY
Wondering if possible to get a small home loan $175000 , have about $10000 in bank ,on disability pension and also work part time ,, have been doing some research but gets confusing one yes you can ,then but this but that ,,,so confusing , help ,,, thanks
Hi I’m a full time carer for my mum I’m looking for a $70000 loan to buy a house is there any hope for me