GENUINE AND NON GENUINE SAVINGS
When assessing your loan application, the majority of banks and lenders request to see 3 months of saving history.
Most lenders do not require genuine savings if you are borrowing 85% or less of a property’s value and very few at 90%.
Most consider genuine savings to be the following, if add up to more than 5% of the purchase price and held over a period of 3 months:
- Savings accumulated
- Managed funds or shares
- Term deposits
- Equity in an existing property
- Inheritance (held in the applicants account for at least 3 months)
Banks want to know that you are likely to be a good borrower by how consistent you are with your savings plan. To be in a better borrowing position, it is suggested that you plan ahead and save for your deposit over a considered period of time to show commitment.
The following doesn’t count towards genuine savings:
- Gifts
- Tax refund
- Lump sum deposits
- Bonuses
- Asset sales
- First Home Owners Grant (FHOG)
- Funds held in a business account
- Any borrowed funds e.g. a personal loan
- Developer’s or builder’s rebates/incentives
Every lender has different rules regarding saving requirements so please call us to discuss your situation in detail.
If you’d like to know more, please contact us for a FREE no obligation consultation on 03 8390 5855 or email mitesh@thinkandgrowfinance.com.au