Purchasing a property could be a challenge. You may arrange your finance first or shortlist a property to purchase. You could indeed consider cut down your expenses with the goal of saving your deposit because you know owning a property would be impractical without saving in your hand. Irrespective of your approach, an acquisition of a home can be cumbersome.
This series of articles will navigate you through the process of property ownership to give you the abstract version of home ownership.
Deposit – the Initial step
The initial step is to prepare yourself financially. No lender will provide you with 100% of the property value. There are exemptions where you may borrow 100% of the property value yet.
Your first measure should be to save the deposit. Most lender’s precondition is to save a minimum of 5% deposit. This deposit also is known as genuine savings. The lender requires you to save it over 3 months using the proceeds from your salary or hold a deposit/ saving under your name for 3 months.
However, most lenders want the “Lenders Mortgage Insurance” to be payable by the borrower in the current lending environment. Therefore, you need to have a 7% to 8% deposit to acquire a house. In the present situation, the government has exempted stamp duty for the first home buyers subject to conditions. If you do not satisfy the first home buyer stamp duty exemptions, your deposit should include stamp duty.
If you have any questions in relation to deposit for a home or other questions in relation to Lender’s Mortgage Insurance, simply contact us.
How to prepare for the home loan – a Bank or a Mortgage Broker – we will discuss this in our next post