By James O’Shea
When going for your first home loan and you want to borrow 95% Lenders will always ask you about your ‘genuine savings’.
This describes the savings you have accumulated by yourself.
Every lender has its own policy for genuine savings, which depends on the amount that you borrow, and some may not even require it at all.
As a general rule, lenders will accept as genuine savings any funds that amount to 5% or more of the purchase price. There are however some lenders that will except 2%
· Savings pattern deposited into an account for at least three months
· Shares or managed funds held for at least three months
· Cash gift held for at least three months
· Inheritance funds held for at least three months
· Rental ledger paying the same as savings over 3-6 months
On the flip side, the following will not be considered genuine savings:
· Monetary gifts
· Tax refund
· Bonuses from work
· Profit from the sale of an asset other than a property, such as a vehicle
· Borrowed funds
· Short-term cash savings
. First Home Owners Grant
These are not included in the “genuine savings” category, however, would be accepted in the non-genuine savings category that can be used above your 5% deposit.
If you are struggling to come up with genuine savings in your desired time frame, there are other solutions available to get you into the market sooner. By having a family member go guarantor on your loan you also maybe able to bypass the need for genuine savings.
Getting your head around genuine savings can be challenging, but we can explain it to you in greater detail and answer any questions you may have.
Make an appointment with the Green Apples Finance team today and we’ll make sure we find the right lender for your financial situation.
Call us today on 02 4975 3708.
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