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November 24, 2021

How Much Do I Need To Save For A Down Payment?

When you put a down payment on your mortgage, you will need to take out a loan to cover the remaining costs. Over time, you will pay back the loan (plus interest) every month. A higher down payment allows you to pay a lower mortgage. If you are looking to take out a mortgage in Sunshine, VIC Australia, look no further than STARK Finance to get started. We’re a team of experienced and professional advisors who have all been homebuyers before and know how intimidating it can be to find accurate information and get started with the mortgage process. We care about you and are always on your side.

  • Remember: Don’t confuse a down payment with closing costs for a home. Always remember to budget carefully so you can borrow and spend within your means. Talking to your realtor and mortgage broker can help to clear up any confusion you may have about all the money you should actually expect to spend on your new home

Benefits of a Higher Down Payment

Putting down a higher down payment on a home can allow you to receive better mortgage options. Some examples of things that may be affected by the size of your down payment are:

  • The type of mortgage you qualify for
  • The amount of money you are able to borrow for your loan
  • The terms and conditions of your loans
  • The size of your monthly mortgage payments
  • The size of the home you can afford
  • The locations where you can afford to buy a home
  • Money you will have left over

Putting a larger down payment on a home can help you appear less of a risk in the eyes of money lenders and mortgage brokers. This means that you may qualify for lower interest rates and you may end up paying less in fees (such as for mortgage insurance) than you would if your down payment were smaller. Higher down payment, lower mortgage!

Putting a smaller down payment on a home can allow you to buy a home sooner rather than later, which could be a good option if you are hoping to move into a new place quickly and you don’t have the time to save money for a larger down payment. However, a smaller down payment on a home means you will need to borrow more money, and you will end up paying more interest in your loan over time. The amount of interest you pay on a house can add up quickly, so you should always talk to your mortgage brokers and budget carefully.

What Should I Expect to Spend on a Down Payment?

If you can afford it, the ideal down payment for a new home is at least 20% of the home’s purchase price. This waym you will not likely be considered a risk in the eyes of money lenders. Plus, it will take less time to pay off your loan, and you will not need to borrow as much money. This means you will end up paying less interest on your home (and paying less for it overall).

The fact that you can afford to pay 20% of the home’s price upfront is also a good indication to money lenders that you have experience saving money over time. It also indicates that this house is important to you and that you are likely to continue paying off your loan in order to continue living there.

When you’re ready to put a mortgage down payment on your new home, STARK Finance will be there to help. We are very familiar with the steps of taking out a mortgage in Sunshine, VIC Australia and encourage you to contact us today with any questions you may have.