August 04, 2013
Saving a deposit for a home loan presents a large challenge to potential home buyers. You will need to save a minimum deposit of at least 5% of the property purchase price, as well be able to pay the Property Stamp Duty. Whilst 5% is the minimum, and that makes your loan amount maximum, a deposit of 20% of the property’s value presents important advantages. A deposit below this percentage means that the lender will need to refer your submission to a mortgage insurance underwriter. Not only will you need to pay Lenders Mortgage Insurance, but also the underwriter imposes other constraints on the approval process, such as location and type of security. Furthermore, I can offer you more options when the deposit is higher. There are several ways to boost your savings, such as: 1. Reduce your eating out in restaurants 2. Take a cut lunch to work 3. Cut out unnecessary subscriptions, such as magazines, interest groups 4. Reduce impulse buying 5. Try to put away a fixed amount from your salary 6. Use a term deposit savings account, where access is limited 7. If you have a credit card or personal loan debt, pay it off as soon as possible, thus reducing the amount of interest charged. There are other ways which apply to your own situation, but you have to hurt yourself for a future gain.