© Copyright 2024 Tella (New Zealand) Limited. All Rights Reserved. Powered by Tella.
Please Note: This newsletter was originally published on 15th September 2023. While the information presented here may still be valuable, some aspects may be outdated.
Spring has arrived, and with it comes the perfect opportunity to take the first steps towards your home ownership dreams. In this post, we'll teach you all about deposits, how to build them, how much you'll need for your home loan and what happens if you don't have enough?
Before you can step into the world of home ownership, it's essential to build a strong deposit. Here are some ways to piece together your deposit:
For more information on building your deposit, or any other home loan related topics, explore our informative guides in Tella's Learn section here.
Understanding Your Deposit Requirements
The deposit requirements may seem complex, but we're here to simplify it for you. While some lenders may accept a 5% deposit for first home buyers, it’s common practice today to aim for at least a 10% deposit. A larger deposit not only opens doors to better loan options but also paints a responsible financial picture for lenders. Also, understanding your Loan to Value Ratio (LVR) is important, as it affects your interest rate. If your LVR exceeds 80%, you are likely to have a Low Equity Margin added on top of the standard interest rate.
Starting Early: The Key to Your Success
Kickstart your deposit journey as soon as possible. Banks consider your spending habits when assessing your loan application, so responsible financial behaviour is essential. Prepare a budget, closely monitor your expenses, and devise a savings plan that aligns with your goals. Going hard and being aggressive with repayments up front could save you thousands of dollars over the term of the loan.
Why Prepare a Budget?
A well-thought-out budget helps you:
Make saving effortless by automating transfers from your income account to a dedicated savings account. This streamlined approach allows you to grow your deposit without the hassle of manual transfers.
At Tella, we're dedicated to helping you make informed decisions on your home ownership journey. Feel free to reach out for a free, no obligation chat with our mortgage experts.
Book your call today, and let's make your home ownership dream a reality!
© Copyright 2024 Tella (New Zealand) Limited. All Rights Reserved. Powered by Tella.