Minimum Deposits

March 15, 2013
Ian Robinson

When purchasing property the option exists (or may be the only one if you have no other property as collateral) to place down a cash deposit on the property and borrow the rest.

Most lenders are looking for a minimum of a 5% deposit on a purchase of a property. If your total deposit is less than say 10% then they will want to see that that initial 5% of it at least has been saved up in an account in your own name for some minimum of 3 months or so and they will want to see statements of that showing the money being amassed.

That minimum 5% can not come from sales of vehicles, or gifts, inheritances etc but must be through saving. There is scope to avoid having to show that by showing that you have been paying rent for a minimum of 6 months and getting a letter from an agent stating that, how much and that it is all in order.

That only takes the place of showing the savings - you still need then to have the money available.That is all for deposits less than 10%.

As a rule if you have more than that then a latest statement showing the funds in an account is sufficient to get you through.

Of course the rest is all dependent on how much you earn, your existing debt level etc.

Posted in: Home loans

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