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Can $25,000 Home Builder be used as a deposit? Questions leave prospective house buyers confused



When single father Ben Duvall heard about the Federal Government's $25,000 HomeBuilder subsidy, he thought it could be the makings of a dream come true.


There's been a frenzy of interest in the Federal Government HomeBuilder plan

But there is confusion over whether the $25,000 grants can go on a deposit

Mortgage brokers say they don't have all the answers would-be clients want


"Getting my own place where my daughters can have their own rooms would be just perfect for me," he said.


"Wouldn't have to be big, just something I could call my own."


Mr Dufall works on a gold mine at Bandya, more than 1,000 kilometres north-east of Perth, on a one-week-on, one-week-off roster.


Despite being on a mining wage, the 42-year-old's divorce seven years ago has left him with few savings, so he has been trying to find out if the money on offer from the Government could go towards a deposit for a new home.


"I might work up north, but after child support's paid, you're paying nearly 50 cents in the dollar in tax. There's not a lot leftover and particularly in regard to saving up for a deposit for a house," he said.


"I was scouring the papers and I was scouring the internet, couldn't find any information as to whether or not it could be used as a deposit.


"I've called brokers, I've called the banks and no-one seems to know what's going on with it."


He said the lack of clarity was frustrating.


"It just seems ludicrous to me — let people know what's going on or allow us to be using that as a deposit and you'll actually probably drive another building boom," he said.


'A real kick forward', but questions persist


So what do the brokers say?


Don Crellin said his mortgage brokers, who often worked with clients in the outer suburbs of Perth and Melbourne, had been fielding a huge number of calls from prospective homebuyers.


"It is generating a great deal of inquiry. I think it's great, particularly for first home buyers coming into the market, it's certainly something we haven't seen before and it certainly does give first homebuyers a real kick forward," he said.


But he said a lack of detail from the Federal Government meant his brokers did not have all the answers would-be clients were seeking.


A lot of the questions that they have is around how they can use the grants … can they use it in terms of deposit, when will it be paid?" he said.


"The sooner we are able to get to that, the better advice we're able to provide our clients in terms of financing options."


Mark Wilkins, a Mortgage broker in the inner Perth suburb of Wembley, agreed.


Mortgage broker Mark Wilkins says it would help to know when the grant will become available.


"You can sign them [clients] up, but you've also got to warn them we don't know, we don't know when the money is going to be available," he said.


On the question of whether the $25,000 could go towards a deposit, Mr Wilkins believed the answer was "yes" and "no".


Most other banks will insist on a minimum of 5 per cent genuine savings 


So what do the banks say?


When the ABC approached the big four banks for comment, they provided varying levels of detail.


But the unanimous sentiment as they were not keen to allow people with next-to-no personal savings to use the Government cash towards a deposit.


A spokeswoman said the bank's standard lending policies would continue to apply.


This is to ensure our customers are able to appropriately manage their home loan commitments both today and in the future," she said.


We are working on it: Minister


Federal Housing Minister and Assistant Treasurer Michael Sukkar said the Commonwealth was working through the implementation of the scheme with state and territory governments and it would be delivered through yet-to-be signed national partnership agreements.


"The agreements will be designed to complement existing state and territory first homeowner grant programs, stamp duty concessions and other grant schemes," he said.


Conclusion - Adam Wiley, Regional Finance Brokers


In my opinion, I believe there will be changes from what I know, some banks have already made representation to the government to apply for the $25,000 on the applicants' behalf, therefore, it will be used within your finance application similar to the $10,000 building Grant currently on offer.


In the meantime please don't hesitate to contact me if you have any questions or queries 02 6885 0588

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