05 Oct Do I Need a Deposit to Buy My First Home?
We get asked this question a lot. The short answer is “no, not necessarily,” but the long answer is a bit more complicated. Perhaps a better question would be, “should I use a deposit on my first home?”
More important than the deposit or no deposit question is making sure the mortgage you end up with is suitable for you and your family. Obviously, having no deposit is not ideal if your monthly mortgage payments restrict your ability to enjoy life, or doesn’t allow for family emergencies. In fact, focusing on not needing a deposit is a great way to eliminate solutions that would be potentially better in the long run.
When we work with first home buyers, we consider the circumstances financially, and also personally. Your mortgage is with you for a long time, and so it must fit into your life, and not the other way around. We encourage our clients to keep an open mind with regards to how they structure their mortgages, and find something that they can not only live with, but that will offer the best lifestyle also.
You don’t necessarily need a deposit, but if you have finances available, make sure they are being utilised in the best possible way. There is no point in having money sitting in a bank account doing nothing if it could be reducing your debt and as a result potentially increasing your cash flow in the medium term. of course, this is all dependent on individual circumstances, and as a result it’s vital that you evaluate all options before eliminating any.
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