How to save a 20pc house deposit
WHERE TO STASH CASH
FIRST-HOME buyers hoping to crack into the market have no need to rush in because prices look set to fall further, predictions show.
But experts have urged borrowers to knuckle down and start a serious savings plan if they haven’t already because it can take years to get a fat wad of cash together. hurdle for entry-level buyers.
“Set a realistic goal for what you can afford to buy and therefore what you need to save,” she said.
“If you don’t want to pay lenders’ mortgage insurance (LMI), or don’t have the support of a guarantor, you will need to save 20 per cent of the purchase price plus the costs associated with the purchase.”
She urged potential first home buyers to wipe any debts so they could turn their attention to saving.
“Avoid accruing buy now pay later debt and credit card debt,” Ms Mitchell said.
“Lenders view debt as a liability and it may decrease your borrowing capacity.” are pretty debt averse and we like our lives to be quite flexible,” Mrs Nanopoulos, who runs her own marketing agency, said.
“We’ve saved about a 20 per cent deposit ($180,000) and by the time we buy we might have more than that; we didn’t want to pay lenders’ mortgage insurance.”
Mr Nanopoulos said they put together a spreadsheet to work out their earnings and expenses. From there they created a savings plan.
Mrs Nanopoulos said her best advice was to “know where your money goes”. TUCKING money away in the bank often leaves customers with pitiful returns as low as 1-2 per cent.
Former Sydney Swans star and director of business development at roboinvestment firm Six Park Ted Richards urged savers to think of other alternative to getting decent savings together for their house deposit.
“Shares can be attractive for savers wanting higher returns, but they come with high levels of risk, especially over a relatively short time horizon,” he said.
“Infrastructure and international property are asset classes which can provide less volatility to shares, but they’ve still returned close to 20 per cent over the last 12 months.”
He suggested borrowers looking for better returns consider buying shares or exchange-traded funds — an investment fund traded on the stock exchange.
“If you’re interested to do it yourself the cheapest place to buy shares and ETFs is through an online broker at around $10 a trade,” Mr Richards said.