What counts as genuine savings?

[Matthew88]

Hello,

I’m looking to purchase a property in Sydney that is currently priced at $800,000. I have some funds saved up but I don’t know whether it will be enough to cover the minimum deposit requirement.

[Otto Dargan]

Hey Matt,

Welcome to the forums.

Since you’re looking to borrow a 96% LVR, you will first need to make sure that you have at least 5% of the property value as genuine savings in your bank account.

In your case, you would need $40,000.

Secondly, 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.

Please feel free to call us on 1300 889 743 or complete our free assessment form and we can let you know if you meet the genuine savings requirement.


Cheers,
Otto

[Matthew88]

Hey,

Thanks for helping out. The money that I said I had saved up actually came as an inheritance from my nan when she passed away last year. Just to be on the safe side of things, will this be an issue while applying for a home loan?

[Otto Dargan]

Hey Matt,

We are glad you asked us this question.

Inheritance as a deposit is classed as no genuine savings or non-genuine savings.

However, some lenders will consider this if you can provide a letter from the Executor confirming the amount and date that the funds will be received.

You can refer to our genuine savings page to go through the list of what counts and what doesn’t count as genuine savings.



Cheers,
Otto

[Matthew88]

Hmm. That’s concerning. But I’ll go through the link to see if I can find an alternative to solving my problem. Do let me know if there are other ways to get approved without genuine savings. Any assistance would be very appreciated.

[Otto Dargan]

Hey,


There are actually a couple of great options available for you. The first being a 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 Lenders Mortgage Insurance (LMI.

If you’ve been renting and can prove that you’ve been making timely payments for at least 3 months, some lenders can make an exception to their normal genuine savings policy and can consider other sources of deposits such as a gift from your parents.

Please call us on 1300 889 743 to discuss your situation and we can you help confirm whether you’re eligible for a guarantor home loan or non-genuine savings solution.


Cheers,
Otto