How does a gifted deposit work?

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Don
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Joined: Thu Mar 14, 2019 4:50 pm

How does a gifted deposit work?

Postby Don » Thu Mar 14, 2019 4:51 pm

Hi, my own savings are simply put not enough to cover the deposit. So, my parents have agreed to gift me the money. How does a gifted deposit work? What do I need to know before I go down this path?

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Otto Dargan
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Re: How does a gifted deposit work?

Postby Otto Dargan » Thu Mar 14, 2019 6:34 pm

Hello Don. Welcome to the forums.

Most banks today will only consider home loan applications if you have at least 5-10% in genuine savings. One of the more popular ways to avoid the genuine savings requirement is a gifted deposit from your parents.
With a gifted deposit, you can borrow up to 95% of the property value with some lenders.

Banks usually require parents to evidence that the money is a gift and not a loan. A signed gift letter will suffice as proof with most lenders.

Speak with one of our experienced mortgage brokers by calling us on 1300 889 743 or fill in our free assessment form to find out if you qualify for a gifted deposit home loan.

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

Don
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Joined: Thu Mar 14, 2019 4:50 pm

Re: How does a gifted deposit work?

Postby Don » Thu Mar 14, 2019 7:18 pm

One of your webpages mentions using paid rent as genuine savings. Can you elaborate?

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Otto Dargan
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Re: How does a gifted deposit work?

Postby Otto Dargan » Fri Mar 15, 2019 11:26 am

Hi Don,

Yes, paid rent can be used as evidence of genuine savings. However, you’ll still need a deposit. Paid rent serves as proof of your capacity as a borrower to make repayments on time and in full.

In order to qualify for rent as genuine savings mortgage, you need to show a rental ledger from a licenced real estate agent showing that shows you’ve been making your rental payments fully and on time for at least 12, 6 or even 3 months.

You can find a rental ledger or a rental reference letter template here, which you can provide to your property manager to complete.

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

Don
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Joined: Thu Mar 14, 2019 4:50 pm

Re: How does a gifted deposit work?

Postby Don » Fri Mar 15, 2019 1:17 pm

Oh yeah, that makes more sense.
Since the LVR on my loan will be quite high, how much LMI do I have to pay?

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Otto Dargan
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Re: How does a gifted deposit work?

Postby Otto Dargan » Fri Mar 15, 2019 1:58 pm

Hi Don,

For any home loan with a Loan to Value Ratio above 80%, you’ll usually be paying the Lenders Mortgage Insurance (LMI).

You can use our LMI calculator to find the cheapest LMI from our panel of lenders.

A great way for you to avoid LMI altogether is by using your parents as guarantors. With a guarantor home loan, you can borrow up to 100-110% of the property value with no LMI.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a guarantor home loan.

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


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