Every lender has their own terms and conditions, and this is intended only as a general guide to understanding this topic. Contact us to discuss your individual circumstances.
When you are borrowing more than 80% of the purchase price of a property, you may have to provide proof that you have at least 5% of the purchase price as Genuine Savings.
Proof of genuine savings can include documents that evidence some of the following:
✓Personal Savings Account
✓Investments, such as shares or managed funds
✓Equity from Real Estate already owned
✓Rent paid to a rental agent
✓Additional Superannuation payments
Documents to prove your capacity to save (and therefore your ability to commit to loan repayments) need to be provided for the last 6 months. You must be able to demonstrate a savings pattern with an increasing or steady balance, and a closing balance of at least 5% of the property purchase price.
Any lump sums like sale of car, accelerated debt repayments, gifts, Tattslotto wins, car sales and inheritances cannot be included – unless they were received more than 6 months ago, and are still in the savings account.
Genuine Savings must be in an account held by at least one of the borrowers. It can’t be in your spouse’s name if they aren’t a borrower and it can’t be in a business name – even if you are the sole owner of that business.
We can sometimes use rent that you pay towards your genuine savings, but you must be renting through a rental manager, and the lender will require a rental ledger report from the managing agent. Private rentals can’t be used.