So I have just acquired a large sum of cash to pay the deposit for my dream home, I have found the best loan option that is perfectly suited to my situation.. but wait, I can still have my loan declined?
That’s right, lenders often review if the money in your bank account is of ‘genuine savings’.
A basic understanding of what is meant by the term ‘genuine savings’ along with tailored financial advice, you can get one step closer to acquiring your home!
What do you mean by the term ‘genuine savings’?
As the term implies, this is the savings that are held or accumulated in a savings account for a minimum period of three months.
Can other assets be considered as genuine savings?
Yes, some examples include; term deposits, shares, and equity in property that are held for at least three months.
Also, if you have accumulated any debts and have been making extra repayments, beyond the minimum requirement, you can use this towards the calculation of your genuine savings.
What are examples of assists that do not qualify as genuine savings?
- Gifts from your legal guardians
- Tax returns
- Income Bonuses
- Inheritance of assets
- If any of the above mentioned examples’ applies to you, place those funds into a personal savings account and hold them there for three months.
Can I buy a property if I don’t have genuine savings?
Sometimes lenders offer the option of borrowing up to 95% of the purchase price without having genuine savings. However, the minimum requirement of paying the deposit plus additional costs that include stamp duty and legal costs need to be paid. Therefore having genuine savings is crucial in the process of acquiring a home.
Contact us today and we will provide you with the premium advice you need to achieve your property goals!