If you’re saving for a property, it can be difficult to know when you have enough money to seriously go looking for your dream home. After all, a home loan is usually the biggest financial commitment you will make. Logic suggests you should save as much money as possible before you start looking for a property. So how much money do you really need to put a deposit on a property these days?
Everyone’s financial and life situation is different, along with their purchase requirements. However, there are certain considerations and general rules that will help you know when you’re financially ready to research a suitable professional lending institution to assist with your purchase.
Most lenders are generally willing to finance home purchases up to 95% of the property value, provided you have an exceptionally strong employment and savings / credit history, along with proof of a consistent savings plan. The loan amount will also strongly influence the lender’s decision. So if the property value is $380,000, you could obtain a home loan with a deposit of $19,000. However, you will also need to purchase mortgage insurance with less than 20% deposit.
If your employment and savings / credit history is not so strong, or you don’t have the ability to service the loan repayments, the lending institution would generally only lend up to 80% of the property value.
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