What are genuine savings? Find out whether your rent & other deposit types can be accepted as savings for a home loan in Australia.
Try our Genuine Savings Calculator to find out if your deposit can be considered as genuine savings by the bank – http://www.homeloanexperts.com.au/mortgage-calculators/genuine-savings-calculator/
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What are genuine savings? Why do the banks care whether you have genuine savings or not?
John wants to buy a home, and he knew that he had to prove that he is good with his money.
So John worked hard over the last year and has managed to save enough money for a deposit on a house. Genuine savings is effectively the money that he has saved himself.
How much do you need? Banks normally like to see that you have saved a minimum of 5% of the purchase price, the rest of your deposit can come from anywhere.
Banks can see that John is very likely to make his repayments on time so it is easy for him to get his loan approved.
However, Mary’s situation is different.
Mary’s parents gave her some money to use as a deposit. The banks see that she has a good job, however they just aren’t sure if she is good with her money so they won’t lend to her.
Let’s see if we can help Mary to get approved.
Firstly, savings in a bank account aren’t the only type of genuine savings.
If Mary has shares or already owns a property then some banks will accept this as genuine savings.
In fact if Mary has been paying her rent on time then this could count too!
Whereas a gift, bonus from work, first home owners grant or the money from selling her car wouldn’t normally count.
You can use the genuine savings calculator on the Home Loan Experts’ website to see how the banks will see your situation.
Unfortunately for Mary, she still doesn’t have any genuine savings! Can she get a loan?
Yes she can, as long as everything else about her situation is ok!
Mary calls the Home Loan Experts and they help her to get approved by a lender that doesn’t need genuine savings!
Well done Mary!