First home buyers need more savings

Almost one third of first home buyers who enquire about getting a loan will be rejected because they don’t have enough savings according to a leading mortgage broker.

“The reality is today, banks are going to be more selective and because of their competitive position… if they have a number of applicants they're not going to look outside the current loan to value ratios or savings because there's enough business around,” Loan Market Group chief operating officer Dean Rushton said.

“There is a requirement around genuine savings,” he said. “So (home buyers) have a choice now. Either drop down the price of the property or gather a large deposit. People need to plan further ahead in terms of finance… the reality is people will need to put in a savings plan that will take them six to 12 months.”

Source: Business Spectator/AAP