Genuine Savings is a term most Banks and Lenders use for your Deposit when you are purchasing a house. Banks and Lenders are looking for a commitment to show you can save money or at least commit to a regular payment each week/month/fortnight.
So, what is considered Genuine Savings?
Typically, a Bank or Lender looks at your savings history over the past 3 months and as long as 5% of the purchase price have been saved or accumulated over this time they will consider it Genuine Savings.
It’s for this reason the following things are not considered Genuine savings by Banks and Lenders,
· Tax Returns
· Inheritances
· Gifts
· First Home Owner Grants
As with most Banks and Lenders there are circumstances where Genuine savings is not needed or when you can use something else to show you are able to meet a commitment and this may be when;
· You can show Rental Ledger from a real-estate agent for 12 months or more
· You have a Family member using security as Guarantor
· Your deposit is over 10%
There are always other circumstances and because each loan is different you are always best to talk to your Broker 6-12 months before you are looking to borrow so things such as your deposit can be discussed.
As always if you would like any more information please don’t hesitate to contact me maryanne@360mortgagesolutions.com.au