- November 8, 2018
- Posted by: Streamline Finance Services
- Category: Finance
When you are looking to finance your property purchase there is one major factor that needs consideration and that is your deposit. There are many ways you can get this together but these are 3 of the best ways to have your deposit ready.
Put money away every time you are paid
This is the most common way of getting a deposit together and this will allow you choice of most lenders and offers. This way is all about putting an amount say $500 into another bank account in your name each month or even each time you are paid. This allows the lender to see that you can put part of your income away each month like repaying a mortgage. The banks normally like to see this happening over a 3 to 6 month period and the account you are depositing the money into is in your name.
Selling an asset
When you are needing a deposit to purchase a property selling an asset you already have can help you get those funds together asap. Most common assets that customers have and might be willing to sell are things like a Car, Motor Bike, Boat, Collection of goods. These sort of assets normally can be sold fairly quickly and you can have the money deposited into your account once you have exchanged. Now with selling this sort of an asset the bank might want this amount to equal a larger % of your purchase price Example: Some lenders will require this amount to be 10% of your purchase price, so if you were looking to purchase a property for $300,000 this deposit would need to be $30,000
This way is becoming a very popular way to help someone save on costs and meet the banks requirement around deposit. This works by a parent or guardian offering their home or investment property as additional security when you are looking to purchase. You may still need to have some money saved but it can be less because of the additional security offered by the parent.
Normally the bank requires you to have a 20% deposit to avoid Lenders Mortgage Insurance but if you use a parental Gtee this is not needed. Example: you might have 5% saved + the bank will use the parents property to make up the 15% shortfall ( 5% from you and 15% from parents =20% )
The parents don’t borrow any money or give over any cash the bank will take their property as security over the % shortfall needed to make up the 20%
In all of these of these cases its important to seek professional advice and to know which is the best option is for you. So please give me a call anytime Shannon Gibbons 0417 131057