Using the genuine savings calculator

Any general questions you might have in regards to loans and finance.
AryaT2
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Joined: Wed Jan 30, 2019 6:24 pm

Using the genuine savings calculator

Postby AryaT2 » Wed Jan 30, 2019 6:26 pm

Hello,

I’m an Australian citizen currently living with my brother and his girlfriend in Queensland. Since they’re getting hitched in a few months, I think this is the right time for me to find a place for myself. I’ve been doing some house hunting lately and I think I’ve found a decent house in Wollongong that’s priced at $750,000.

I work as a primary school teacher and have some money saved up in my account. But I have no idea if it’ll be enough for a deposit. Please help!

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Otto Dargan
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Re: Using the genuine savings calculator

Postby Otto Dargan » Wed Jan 30, 2019 6:59 pm

Hi Arya,

Welcome to the forums.

You will first need to figure out how much you are expecting to borrow from the bank. If you’re planning on borrowing anything less than 80% of the property value, genuine savings aren’t necessary. But if you want to borrow over 85% of the property value, some conditions may apply.

Genuine savings is a term used by lenders to define funds that a home loan applicant has saved themselves over time.

Australian lenders require borrowers to have saved at least 5% of the purchase price in an account in their name.

Some lenders, however, have different genuine savings requirements depending upon the amount that you borrow.


85-90% of the property value: Genuine savings is no longer required.

More than 90% of the property value: Most lenders require genuine savings.

95% of the property value: Almost all lenders require genuine savings.

Each lender has their own genuine savings policies. You can use our genuine savings calculator to find out how much you need to prove in genuine savings.

You can also call us on 1300 889 743 or complete our free assessment form and one of our specialist mortgage brokers will let you know if you qualify for a loan.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

AryaT2
Posts: 4
Joined: Wed Jan 30, 2019 6:24 pm

Re: Using the genuine savings calculator

Postby AryaT2 » Wed Jan 30, 2019 7:00 pm

Hey,
I appreciate the help. I was actually hoping for a 90% home loan. So that must mean that I need to show that I have $37,500 as genuine savings in my account. I suppose I can do that. Can you explain to me how banks know that the amount I have in my account is actually genuine savings?

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Otto Dargan
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Re: Using the genuine savings calculator

Postby Otto Dargan » Wed Jan 30, 2019 7:53 pm

Hey Arya,


It’s actually quite complicated to classify what is and what isn’t genuine savings! In addition to this, each lender has their own genuine savings policies!

Our genuine savings calculator can not just help you find out how much you need to prove in genuine savings, but it can also tell you whether the lender will accept it.

The following types of savings are considered to be genuine savings if they add up to be more than 5% of the purchase price:

-Savings held or accumulated over 3 months.

-Term deposits held for 3 months.

-Shares or managed funds held for 3 months.

- Equity in real estate (varies depending on the lender).

- If you’ve been renting for the last 3 months then some exceptions may apply.

- Even salary sacrificing under the First Home Super Saver Scheme can be acceptable.

A few select banks will request a 6-months saving history instead of the normal 3 months required by other lenders.

This determines which customers have received a deposit from another source and simply added to it over three months to make it look like genuine savings.

The reason why most lenders prefer regular deposits over a period of time is that this is a good indication that you make regular mortgage repayments.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

AryaT2
Posts: 4
Joined: Wed Jan 30, 2019 6:24 pm

Re: Using the genuine savings calculator

Postby AryaT2 » Wed Jan 30, 2019 7:54 pm

Hey! Thanks for all the help. The cash in my account all came from my teaching job so I believe that it’ll all check out. Things are looking real bright. I read somewhere that I can borrow over a 100% home loan. What’s that about? I’d appreciate it if you could shed some light on it.

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Using the genuine savings calculator

Postby Otto Dargan » Wed Jan 30, 2019 8:34 pm

Hey,


The loan that you’re referring to is the guarantor home loan. With a guarantor loan, you can borrow up to 105% of the property value, and you don’t need a deposit.

You also do not need to pay the Lenders Mortgage Insurance (LMI).

We are experts when it comes to guarantor home loans. So call us on 1300 889 743 or complete our online enquiry form to discover if you qualify for a guarantor home loan!


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

AryaT2
Posts: 4
Joined: Wed Jan 30, 2019 6:24 pm

Re: Using the genuine savings calculator

Postby AryaT2 » Wed Jan 30, 2019 8:34 pm

Oh! That sounds wonderful. I’ll do some research and get in touch with you by the end of this week. Thanks for everything, Otto. Cheers!


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