How much money do I need to save for a house? Determining how much money you need to purchase a property is an open-ended question as the answer greatly depends on your end goal. WHAT ARE YOUR GOALS? When looking at property investing, everyone has a different goal. Whether it be buying one house or multiple properties, buying to live in or to invest – every scenario and set of circumstances requires a differing amount of funds and a different financial set-up. LOW DEPOSITS AND LMI A property can be purchased with as little as a 5% deposit, however, lower deposit loans must be covered by Lenders Mortgage Insurance (LMI). Banks will generally lend up to 80% of the total amount required and LMI is required to cover the difference. THINK LONG TERM Different amounts will result in different outcomes. Lower deposits may mean more properties may be purchased with the same amount of money. It pays to be aware, however, that there are a limited number of good mortgage insurers in the industry and long-term, multiple low deposit loans set-up with LMI may be seen as high risk, with lenders refusing further financing. DETERMINE DEPOSITS BY YOUR GOALS When considering how much funding is required to purchase a property, always have your goals in mind. A 20% deposit on loans makes it much easier to build a portfolio. For a single property purchase, however, a higher risk loan with LMI would be fine. GET ADVICE ABOUT STRATEGY It’s best to speak to a finance specialist to determine an investment strategy, as that will impact financial requirements. These specialists can come from a variety of backgrounds. Be mindful, there may be a difference in advice from an independent resource verse financial sales people. Speak to accountants, buyer’s agents, investment specialists or others who have achieved what you want to achieve. [Click here to read the rest of the blog https://binvested.au/how-much-money-do-i-need-to-save-for-a-house/]
Posted on: Wed, 26 Nov 2014 23:39:54 +0000
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