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The majority of first time investors are saying that a lack of savings is their number one hindrance to jumping on the property ladder, according to a new survey.
Loan Market Group’s corporate spokesman Paul Smith said a survey of 207 of the company’s mortgage brokers found 65 per cent believe insufficient savings is the number one reason stopping first home buyers from obtaining finance.
But Mr Smith said the situation had improved since late last year when the same survey found 84 per cent of brokers believed the savings issue was the major hurdle for first time buyers.
“The past year has been a historically dormant period for first home buyers so it’s a positive sign to see fewer first time buyers struggling to save,” he said.
“The biggest head start you can have on your home loan begins with maximizing your deposit. This can save you thousands on interest payments as well as charges such as Lenders Mortgage Insurance.”
Mr Smith said one of the main criteria for savings was for lenders recognising ‘genuine savings’, meaning the savings come broadly from setting aside income and demonstrating the ability to budget effectively.
“For many Gen-Y buyers this is a hugely positive sign that they’re creating budgets and sticking to them,” he said.