Perhaps the biggest challenge facing potential homebuyers is the issue
of how much deposit is required to attain a home loan. There are many
misconceptions about how much deposit is actually required, and good
Perth mortgage brokers can offer invaluable advice and guidance when it
comes to a buyer’s options with regards to this.
The deposit is one of the most important factors which will determine
the success or failure of a home loan application. The amount of deposit
that a buyer can put down will impact upon future repayments, amount to
be borrowed, and the amount of interest which will be payable over the
term of the loan. It will also have a significant impact upon whether
loan approval is likely.
Mortgage lenders and banks will have
differing criteria governing what monies can be used as a deposit; the
more money saved for a deposit, the more likely it is that a mortgage
broker will be successful in negotiating the waiving of certain fees,
and a lower interest rate on the loan.
As a general rule of
thumb, most banks will require a minimum of five percent of the purchase
price as deposit, and this must be in what is referred to as “genuine
savings”. This is actual money which one has had in a bank account for a
period longer than three months, at minimum. This money is used to
demonstrate a pattern of savings behaviour.
It is always advisable to have as much money for a deposit as possible
(and one must not forget that fees such as stamp duty and legal fees
must also be covered over and above the purchase price of the property).
The greater deposit paid, the sooner a home loan will be paid off. More
equity in the home will be available. Some lenders will even offer a
discounted rate for interest when a large deposit is offered.
Persons who are self employed or who have income which is erratic can
have a more difficult time gaining a home loan. If one in this situation
seeks to borrow more than eighty percent o the value of a property,
Lender’s Mortgage Insurance may be necessary in order to be approved for
a home loan. This insurance, payable by the borrower, protects the
lender in the event that a borrower cannot make repayments and the
property does not sell for a price that will cover the loan.
One
should always aim to have as much deposit as possible when buying a
property – yet in reality, and with the current economy and the expense
of daily modern life, this can be very difficult to attain. This is why
it is so highly recommended to enlist the services of superior Perth
mortgage brokers. These professionals can help a buyer traverse the
minefield of loan products and find the perfect loan for each
individual’s circumstances.
