Published at: 6/21/2016 3:28:58 PM
Don’t have a 20% deposit? Don’t be put off. You may be able to buy a home even with limited savings.
You may only need a 5% deposit
Here’s some great news. At ME we understand that it’s not easy saving a big deposit, that’s why we let you borrow up to 95% of your home’s value.
It means you may only need a 5% deposit, and that lets you get into your own home sooner.
A bigger deposit is better – if you can manage it
The less you borrow, the lower your home loan repayments – so it’s worth saving a reasonable deposit if you can manage it. Check out our Repayments Calculator to see how your deposit can make a difference to the loan repayments.
Lenders Mortgage Insurance - If your deposit is below 20% you’ll be asked to pay lenders mortgage insurance (LMI). This protects the lender if you are unable to keep up the loan repayments.
How much LMI you pay will depend on the size of your deposit. You may be able to add the cost of LMI onto your loan so that it can be paid off gradually.
FIRST HOMEBUYER TIP
Don’t forget to budget for legal fees, pre-purchase inspections and building/contents insurance on your first home as well as stamp duty.
Other strategies if you have a small deposit
Co-buying – Okay, it’s not for everyone but teaming up to buy a property with friends or family can boosting your purchasing power and let you share the cost of maintaining your home. There’s a lot to think about if you’re buying a home with someone else and you need to plan for it carefully.
Cash gift – Receiving a gift of cash can make your life a lot easier but it may not always get your home loan application over the line. We like to see that you can comfortably manage a home loan, and cash gifts may not count as evidence of genuine savings. That doesn’t mean the money won’t come in handy. A cash gift can be used to cover other home buying costs like legal fees.
FHOG - a financial helping hand
If you are a first home buyer you may be entitled to the government’s First Home Owner Grant. In many states this is only available if you are building or buying a brand new home.
Need more information?
Your ME Mobile Bank Manager is here to help you enjoy a hassle-free home buying process. Contact us on 13 15 63 if there is anything you are unsure of, or take a look at our FAQs.
Want to know more? - find out about how to get ready to buy your first home here.