First home buyers are being left in the dark about a government loan deposit policy that is due to start in less than a fortnight, according to one of the nation's leading mortgage brokers.
Director and Principal Broker Louisa Sanghera said it appeared planning for the Federal Government's First Home Loan Deposit Scheme had been left to the last minute and the policy was now being rushed into existence.
"The scheme was first announced during the election, but it seems the policy is only now being developed when it is due to start on 1 January," Ms Sanghera said.
"It does seem like the policy has been rushed and not been properly thought through.
"With less than two weeks before it starts, first home buyers are mostly in the dark about how the scheme will even work." Ms Sanghera said mortgage brokers were also struggling to understand the finer details of the scheme, including why such a small number of lenders were taking part.
The National Housing Finance and Investment Corporation (NHFIC) recently released the list of lenders involved in the first round of the scheme, with only 27 participating, including just two major banks.
"By restricting the scheme to 27 banks they are reducing competition, which will potentially mean higher interest rates for the type of buyers who are struggling with housing affordability the most," Ms Sanghera said.
"The selection of lenders has also not been transparent, because I can't find any information on which banks applied to be part of this scheme, who was declined or why."
Ms Sanghera said some of the regional lenders given access to the scheme would be of no help to first home buyers who lived in Sydney or Melbourne, which reduces choice even further.
"Many of the lenders are also not available on mortgage broker's panels, even though brokers write about 65 per cent of mortgages in Australia, so we have no access to them," she said.
"How can restricted access to all banks be a good outcome for everyday Australians trying to get into the housing market? How has ASIC even approved this scheme?"
Ms Sanghera said buying your first property was stressful enough without having to deal with a rushed policy and limited number of lenders.
She said many first-time buyers would have to deal directly with the banks because of the limited access brokers had to the lenders in the scheme.
"If first home buyers don't use a broker, they'll have to go through the maze of paperwork and compliance information required to obtain a loan by themselves, which will ultimately make the process much more difficult and stressful for them," she said.
About Zippy Financial Group:
Zippy Financial Group is owned and managed by Louisa Sanghera, with passion and absolute dedication to her clients.
Ms Sanghera has curated a hand-picked team of highly experiences brokers to support her as loan processors, who share her vision to provide exceptional service and look after Zippy clients for life.
Louisa created Zippy Financial after a 25-year career in banking. Through experience, she noticed the broking industry was generally lacking in empathy and genuine client-focused care. She decided to use her expert knowledge and extensive management training to start her own business and the Zippy Financial Group was born.
Being a working mum herself, Louisa had an ambition to create a practice of working mums, supporting them with a career that fit in around their family lifestyle.