How to Save For a House Deposit
For some Queenslanders, the idea of owning a home of their own may seem a very long way down the track. In fact, the very thought of saving for a home loan deposit probably sounds a little daunting. However, it may not be as out of reach as you may think.
A deposit is simply the amount you need to have saved to contribute to the purchase price of the property you intend to buy. It’s a way you can demonstrate to the lender that you have an ability to save and will be able to make loan repayments. The deposit amount will vary according to the type of loan you apply for and will also vary between different financial institutions.
Generally, for a home in which you intend to live you’ll need to have saved about 5% genuine savings of the purchase price or property value as assessed by a registered property valuer – whichever is the lesser amount. You will also need to save for cost of purchase which might include: government charges, bank fees, legal costs and building and pest inspections.
“For instance, if you wish to purchase a home in which you intend to live and it’s priced and valued at $400,000, you will normally require a $20,000 deposit. However, some people may be able to obtain a home loan approval without actually having to put ‘cash’ towards a new purchase. For example, if you have equity in another residential property which is suitable to be included as additional security,” explains Rohan Buckley from REIQ corporate partner Auswide Bank.
For some lenders, apart from what are referred to as ‘genuine’ savings, you may also be able to use gifts, an inheritance or other acceptable funds to contribute to your deposit. “How much deposit do I need to have for the property I am wanting to purchase?” and “What property price range should I be looking at for my income and savings?” are two of the most common questions asked by prospective home buyers according Auswide Bank.
“We can answer those questions immediately, plus answer any other questions relating to the cost of home ownership,” adds Auswide Mobile Banking manager Rohan Buckley. “Prospective buyers can then set a savings goal, in conjunction with a budget, and at Auswide Bank we can help establish a regular savings plan to achieve it. With interest rates at record lows and unprecedented government support such as the First Home Owner Grant, the First Home Loan Deposit Scheme and the Home Builder Grant there has never been a better time to consider entering the property market through the purchase of land on which to build or via an existing home.”
For more information on Auswide Bank home loans, simply contact Rohan Buckley – Mobile Banking Lender on 0438 263 705 today.