9 Followers
Do all lenders for a home loan require that your deposit be made up of savings or can it be part or full cash?
Responses
Hi Bill. Cash is fine however appreciate that lenders are obligated to report large cash transactions to Austrac.
Hi Bill
Great question. The person your buying the house from most likely ultimately want cash but for the loan tou can use things like share or even consistent rental payments to show you ability to save. There is also the option is to use another property, either yours or a family members as security for the loan.
hope this helps
Albert - Awesome Lending Solutions
Hi Bill,
When lending 80% LVR/using a 20% deposit some lenders will not ask to see the source of funds, bank statements etc. to verify funds for completion. If you have cash stuffed under your pillow you could make a full cash contribution to the loan account before settlement date.
Hi Bill, I can assist borrowers with non-genuine savings. Gift, sale of non-property assets, personal loans etc. you just need to show funds available in an AUD bank account before formal approval. Obviously more favourable terms if you can show 5% in genuine savings with 85 % loans with no LMI. All the best
Hi Bill
If you are borrowing less than 80% of the property value then savings are not required. Of course you need to have to demonstrate that you have sufficient funds in your bank account to complete the purchase (20% deposit plus legals)
If you are borrowing more than 80%; you will need to show that you have saved a minimum of 5% of the property value over 3 or 6 months.
Hope this answers your question.
Hi Bill, Lenders want to ensure with the genuiene savings that you have a goos track record to save money out of your salary so that when you get a homeloan you dont end up in bad debts. Most lenders except for non-conforming once expect savings.
There is another way to work around the genuine savings hurdle if you had a rental lease recently on your name and been paying continuous rent for 3-6 months, that rental statement can be presented as a proof of good savings history. Cheers Harish
Thanks Stephen. By cash, I mean for example, a certain amount given to you by parents as a gift. Does your deposit need to be genuine savings over a certain period or does this scenario pass as well?
Bill. Family gifts are acceptable. Lenders do take into account the gift versus the value of the property. From an affordability perspective it is important to ascertain your ability to afford the final loan amount without financial hardship.
Thanks again Stephen
All well said. Please take note for the gift the respective bank will require a statutory declaration with specific wording.
Also if your savings plus the gift from your parent exceeds 15% plus costs for the purchase then no your savings are not required to be 'genuine savings' (using the industry definition) but you will still need to provide evidence in the form of a bank statement showing you have the savings.
Hope that answers your question. Any further help do reach out.
Not all lenders require a stat dec in respect to the gift.
Where one is required I have specific wording that can allow for you to repay the money to the donor at a future time.
A number of lenders actually require the donor to make a false declaration which is unacceptable.