Your Finance Adviser

Preparing for your first home loan? Don’t worry, Your Finance Advisor is here to guide you through the way. If you are wondering how much money should you save for your deposit before you submit your application for the approval of your loan, then you are at the right doorstep. The lending specialists from Your Finance Advisor assist you in the process of loan borrowing right from the time when you submit your loan application to the time you buy the house of your dreams.

Ideally, lenders expect you to submit a 20% deposit. For instance, if you are looking for a property worth $5,00,000, you should have a deposit of $1,00,000 ready with you. The money that you have with you as your savings will not only fund your initial contribution to the purchase price of the property but will also be used to pay the stamp duty, as well as any other fees and charges that may be associated with your purchase of the home.

However, 20% amount of the deposit is not fixed. Many lenders take a significantly lower deposit in comparison with the others. A number of lenders would also lend up to 90% or 95% of the value of your desired property. However, this would be possible only if you manage to meet their specific lending criteria. On the other hand, if your deposit is less than 20% of the value of your home, you would have to pay Lender’s Mortgage Insurance or LMI. Unlike other insurances that protect you, Lender’s Mortgage Insurance safeguards the lender in case you fail to repay the loan amount. LMI is usually a one-off payment made at the time of loan settlement. The bigger your deposit amount, the lesser LMI you would pay.