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Single Parent Home Loans & simple tips to getting onto the property ladder

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It’s hard enough for couples to save for a deposit these days, but now imagine being a single parent trying to achieve this goal on one salary.

Maybe you don’t have to imagine it. I know you might be feeling like you’ve started this journey on the back foot, but let’s set those fears aside because I’ve got you. My friend, it is possible to get a home loan on a single income as an Australian citizen – but you need to be ready to put in the work.

So let’s take a look at some schemes and tips that may benefit you as a single parent to help you on your home loan journey!


The family home guarantee scheme 

Single parents can receive assistance in the way of the family home guarantee scheme, which is open to both first-time homebuyers and single parents that have previously owned a home.

As of 1st July 2022, roughly 10,000 single parents with dependents can benefit from this scheme, helping them to buy a home with as little as 2% deposit and no accompanying lenders mortgage insurance (LMI) payment. Score!

Eligible applicants of this scheme can purchase an existing home, residential property, or townhouse, a piece of land with the house as a packaged deal, or a separate land and contract to build. Not bad, huh?

To be eligible for the family home guarantee scheme, you must meet the following criteria: be single, at least 18 years old and an Australian citizen, have one or more dependent child, plan to be an owner-occupier, and have earned $125,000 or less in the previous financial year (not including child support).


Centrelink Payments

If you’re a single parent currently receiving payments through Centrelink, you may be able to use the Centrelink parenting payment, seeing as most mortgage brokers accept this as a form of payment.

Likewise, single parents who are eligible for childcare benefits and receive child support payments may be able to use these payments towards a deposit as they too are accepted by many lenders.

Don’t forget to hop onto MyGov and complete the necessary Activity Test to see what other payments you may be eligible for, including family tax benefit.


A few tips from me

Schemes aside, there are a few basic rules you need to follow to give yourself the best chance at nabbing your new family home when the time comes.


Save! Save! Save!

Save as much money as possible! Whether it’s making early or extra repayments on existing loans or credit cards, or simply skipping on UberEats if that’s your vice, the more money you have stashed away, the better.

Remember to weigh up cost versus convenience: if you can do something yourself to avoid paying someone else, do it! For example, if it’s cheaper for you to invest in a small lawn mower than pay someone to mow your lawns weekly, you know what you need to do.

Look over your finances and make budget cuts where possible. Weirdly enough, this can even be kind of fun. Once you start cutting out the excess, you’ll start seeing your savings grow.


Maintain good credit

A good credit score will make you seem more appealing to a lender and will give you a broader option of lenders and more competitive loan terms to choose from.

A bad credit score on the other hand can lead to higher interest rates later on, as you are more of a risk to the lender. So to keep these unnecessary costs down (or out completely), avoid taking out loans where possible and keep your credit card use to a minimum.


Keep your property purchase simple

One of my biggest rules as a property buyer is to consider your financial limitations – now and going forward, when purchasing a property. Never buy into a home that will be hard to maintain and difficult to pay off (a single parent with 2 children doesn’t need a 5-bedder, for example).

You may need to sacrifice some of the ‘wants’ to make room for the ‘needs’ when buying a property, but this also shouldn’t mean you sacrifice yours or your children’s comfort in the process.

Firstly, talk to your chosen lender to find out your borrowing power, so you know where you stand and can plan the type of home that will suit you and your children to a tee.

And if you get stuck along the way, Kitty & Miles Property Buyers are just a phone call or email away!

For further information on our buyer’s agent services please view our Services page here

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