Making it all happen
The more you can put towards a deposit, the less you’ll need to borrow and the more you’ll save in interest over the years. Generally you will need a minimum of 5% deposit. To avoid paying Lenders Mortgage Insurance (LMI), you will need at least 20%. There are some loan products now available where the cost of LMI is conditionally waived.
Deposit bonds are a good alternative to using cash or finding short term finance. They are quick to organise and economical compared to the cost of short-term finance. A deposit bond is a guarantee or bond that substitutes for a cash deposit of up to 10%. The guarantee terminates at settlement when the purchaser pays the full purchase price of the property, or when the contract is terminated, or at the expiry date of the bond.
If you don’t have a deposit there are options available to help you in financing your new home.
- Family equity guarantee – typically parents assist their children to raise a deposit by either using the equity in their home to raise a deposit, or offer the equity in their property to reduce the LVR to avoid the cost of Lenders Mortgage Insurance charged on loans greater than 80%.
If you would like to organise a deposit bond or discuss the options, I am happy to call you, or simply email us with your enquiry.