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19 Aug 2022

How Much Deposit Does A First-Time Home Buyer Need?

First-Time Homebuyers

A first-time home buyer will need to place a deposit of 5%-20% of the home’s overall purchase price and it depends on the bank that is involved in the loans and purchasing. A higher deposit of 20% of the home’s cost eliminates a first-time buyer from having to pay for Lenders Mortgage Insurance (LMI) and allows for both a smaller loan amount and monthly payments. If a first-time buyer has a small deposit percentage,  some lenders may accept guarantees from family members that aid in the reduction of an LMI and possibly even increase the loan amount approved for a buyer.

A first-time home buyer with a small deposit percentage can also have a family member assist by donating or gifting a part of the required deposit, or supplying the buyer with an interest-free loan. Our Budget Planner Calculator is a helpful resource available to potential first-time home buyers and outlines the best ways to save for successfully purchasing a home. 

We also recommend saving an additional 5% of a home’s overall purchase price to ensure the proper coverage of settlement costs. At Mortgage House, we are equipped with all of the necessary information and knowledge for assisting first-time buyers and reducing the stressors of buying a first home. We strive for satisfaction and work well with clients to identify the most cost-effective methods for purchasing and verify that the client is receiving the best deal possible on their new home.

First-Time Home Buyer Deposit Conclusion

First-time home buyers will need to pay a 5%-20% deposit on a new home depending on the bank and property cost. Buyers with questions or concerns about the home buying process can contact us at Mortgage House for further assistance. 

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