Savings account track records 'vital to home ownership'

Mozo

Monday 26 July 2010

Prospective first home buyers must have a strong savings history if they are to be successful in the property market, it has been suggested.

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Finance expert Bina Brown noted that first home buyers have come under mounting pressure in recent years, particularly as banks have demanded higher loan-to-valuation ratios.

"As well as the ever-changing property market outlook, there is the ongoing threat of higher interest rates and what that does for someone’s borrowing capacity," added the columnist.

Writing for the Sun-Herald, the money specialist also referred to comments by Mortgageport managing director Glen Spratt who claimed that many banks will look at their customers’ savings accounts in order to determine their ability to pay a deposit and meet home loan repayments.

The comments may encourage more house hunters to compare savings accounts in search of the best returns. Last week, documents obtained by the Seven Network showed that the federal government’s first home saver accounts scheme has not proven to be as popular as was first hoped.

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