When you are thinking about your first home, finding out you should be thinking about saving for a 20 per cent deposit can seem really overwhelming. The good news is that for some of the big non-bank lenders, a minimum deposit required on some products can be as little as five percent of the purchase price of the property, but it’s always a good idea to have a deposit of 20 per cent or more if possible.
So, let’s look at how to get there;
Weekly or Fortnightly payments are better than monthly repayments
Since interest is calculated daily, when payments are made more often you save money in interest over the life of your loan – which means the loan is paid off quicker!
There are many reasons why an application for a home loan can be declined and we’ve listed some of the most common ones below.
Save more when you’re doing well
Keep your eye on the end goal and don’t be tempted to splash out on unnecessary things when there’s more money around! You will earn more interest on a larger amount of funds in your savings account – that’s the real reward!
Right now is one of the best times to be a homeowner! Interest rates are still at record lows with most lenders offering home loans with interest rates below 4% p.a. There’s also a number of different incentives for first home buyers (depending on where you live) which could go towards those “hidden fees” that all add up such as building and pest inspection, conveyancing and legal and loan application fees to name a few. When purchasing a property around $500,000 you can expect to pay anywhere up to $20,000 on top of this.
Check out the State Revenue Office Victoria website for more information.