Home Loans - How Big Should My Deposit Be?
First home buyers frequently wonder how much money they need to have saved before they can apply for a home loan.
The answer depends, of course, on a number of factors - including whether or not the property is being purchased for the owner to live in or for an investment.
It also depends on the value of the property you are looking to buy, which is why careful research is such an important part of the purchase process. Knowing the average value of similar homes in an area you like can be a great first step in the budgeting process.
If you are keen to start saving, a useful benchmark to consider is a minimum deposit of at least five per cent of the purchase price of your desired property for owner-occupiers - and between five and ten per cent of this price if you are planning a property investment.
However, these figures can vary from lender to lender, so it might be worth speaking to a mortgage broker to find out more about your specific situation.
For example, in some cases tenants may be able to demonstrate their genuine savings requirement through at least 12 months of continuous rent payments.
You will also want to consider a number of other factors - including whether you are purchasing property alone or with a partner, the length of time you want to take out a loan for and how much money you already have in savings.
To get more detailed information on your situation, talk to a Loan Market mortgage broker today.