You don't necessarily have to save a deposit if the family chips in

One of the toughest challenges facing first-home buyers is saving a deposit.

Some believe if the family gives them the funds, they'll be able to get loan approval.

However, the banks use your deposit and the means by which you came about it, as part of their assessment criteria for your loan application.

And having the money given to you, borrowing it, or selling something else to get it just won't always cut it.

You also have to prove you can service the loan repayments.

Get it right

Most lenders want to see a genuine savings history when it comes to your deposit.

The theory is, that if you have enough money left over after paying all of your expenses to save money, you should have enough to meet your repayments and manage your finances.

Some lenders will accept rental payments in addition to your deposit to determine whether you can meet your obligations.

But at the end of the day, budgeting and saving a healthy deposit will not only make lenders look at your application more favourably, but it will also give you a head start when it comes to buying your home.

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Jason Gwerder
Tuesday, 30 August 2022

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