Are annual bonus and a gifted deposit accepted as genuine savings?

Any general questions you might have in regards to loans and finance.
Nolan
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Joined: Tue May 21, 2019 1:41 pm

Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Nolan » Tue May 21, 2019 1:43 pm

Hi, I received a lump sum payment of $12,000 as part of our annual performance bonus which we would like to use as a deposit for a house along with a $15,000 gift from my in-laws. We’re both first home buyers looking to buy in Mickleham VIC. We’ve been renting the same place at $370 per week for the last two years and have only recently paid off our student debts (HECs) as a result we do not really have any ‘genuine savings’. We’re looking to borrow between $450,000 - $490,000. We have no other debts except a few thousand in credit cards. Are annual bonuses and a gifted deposit accepted as genuine savings? Is this acceptable to lenders?

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Otto Dargan
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Re: Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Otto Dargan » Tue May 21, 2019 2:27 pm

Hello Nolan. Welcome to the forums.

Most lenders require that when borrowing more than 90% of the property value, as a minimum you would require 5% of the deposit to be in the form of genuine savings. It essentially means funds that you’ve saved up yourself over time.

There are lenders that accept paid rent as genuine savings. That is to say, if you’re able to provide a rental ledger from a licensed real estate agent showing prompt and regular payment for at least 12, 6 or even 3 months, you can use said paid rent as genuine savings. Basically, your rental history is used to prove your capacity as a borrower of making regular payments on your mortgage instead of your own savings.

Some lenders will accept your bonus income and the gifted deposit from your in-laws as a deposit if you can provide payslips and bank statements evidencing the payment of the bonus and a signed gift letter stating unconditionally that it is a gift and not a loan.

We specialise in first home buyer loans.

Speak with one of our experienced mortgage brokers by giving us a call on 1300 889 743 or by filling in our free assessment form and let us guide you through the process of owning your first home.

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

Nolan
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Joined: Tue May 21, 2019 1:41 pm

Re: Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Nolan » Tue May 21, 2019 3:50 pm

That’s a relief! I’m a little uninitiated in this matter so I’m just going to ask, can we use the first home owners grant as a deposit? What other benefits are there if any, if we were to say purchase an old house?

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Otto Dargan
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Re: Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Otto Dargan » Tue May 21, 2019 6:06 pm

Hi Nolan,

Yes, you can use the first home owners grant (FHOG) as part of the deposit. If you’re buying or building a new home then you may be eligible for FHOG. The FHOG amount will vary depending on the state you’re buying in and whether you’re buying a new or established home or vacant land and building, and the purchase price of the property. Please refer to the State Revenue Office Victoria’s website or call their hotline on 13 21 61 to confirm eligibility and benefits.

In Victoria specifically, when buying an established property as a first home buyer, your stamp duty will be waived off for a Principal Place of Residence (PPR) valued up to $600,000, or a stamp duty concession for a PPR valued between $600,000 to $750,000.

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

Nolan
Posts: 3
Joined: Tue May 21, 2019 1:41 pm

Re: Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Nolan » Tue May 21, 2019 6:25 pm

Thanks for clearing all this up. Can you tell me how much the mortgage insurance will be? Also, any significant lender fees, legal fees, charges I should be aware of?

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Otto Dargan
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Re: Are annual bonus and a gifted deposit accepted as genuine savings?

Postby Otto Dargan » Tue May 21, 2019 7:01 pm

Hi Nolan,

Lenders Mortgage Insurance (LMI) is generally applicable when borrowing over 80% of the property value. You can use our LMI calculator to get the cheapest quote by comparing the LMI premium of six prime lenders. There are a few lenders who allow you to capitalise the LMI on top of the home loan, that is to say, add it on top of your home loan.

I’ve listed any additional fees that may be incurred when purchasing a property:
  • Transfer fee: This a government fee for registering your name on the title of the property and removing the vendor’s name.
  • Registration fees: This is a government fee to register your lender’s mortgage on the title of your property.
  • Conveyancing costs: You’ll need to hire a conveyancer or solicitor to handle the transfer of the property in your name. This can cost you between $800 to $1,500.
  • Inspections/ Reports: You may need to conduct a building inspection, pest inspection, and a strat report. This can cost up to $600 in total.
  • Loan fees: Some lenders charge an application fee, settlement or valuation fee. These fees vary from $0 to $900.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a first home buyer's loan with a gifted deposit.

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


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