1.2.3 Amount of Deposit
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It is not always possible to find a loan which covers the full
cost of a new house, and so a deposit will generally be required,
usually between 5% and 10% of the purchase price.
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The greater the deposit, the greater the equity interest in the
property, and the greater the cushion against the danger of 'negative
equity'.
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'Equity' means the value which would be left on sale when the mortgage
had been repaid and all costs covered.
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'Negative equity' refers to the amount of mortgage which would
remain to be paid off after the sale of the house
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