What is Genuine Savings?
Lenders like to see a borrowers’ history of savings – normally the minimum is 3% – 5% of property value and they like to see this saved over a minimum of 3 months for loans above 85% of property Value.
The following types of savings are considered to be genuine savings.
- Savings held or accumulated over 3 months.
- Term deposits held for 3 months.
- Shares or managed funds held for 3 months.
- Some funders will consider rental history as part of genuine savings.
Your options for low deposit loans above 85% lvr without Genuine Savings
- We have a lender that will allow you to borrow to a maximum of $750,000 to 95% of Property Value + cap full mortgage insurance cost for a total of up to 99% LVR. (require rental history)
- We have a lender that will allow you to borrow up to 90% of Property Value + cap full mortgage insurance costs.
Your options for low deposit loans above 95% lvr with Genuine Savings
- We have a lender that will allow you to borrow to a maximum of $750,000 to 95% of Property Value + cap full mortgage insurance.
Your options for no deposit and no genuine savings
The only option would be a family guarantee loan. This is where a new loan is arranged for 80% of property value and a limited guarantee loan is arranged on a family property for 20% + costs which would allow you to borrow up to 105% of property value.
The Guarantee can be removed when loan amount does not exceed 90% of property value (with mortgage insurance) or 80% with nil mortgage insurance to pay. Guarantee can be borrower’s parents, with some lenders considering guarantees from immediate family members such as siblings, grandparents, spouses, de facto partners or adult children.Guarantor loans have several benefits:
- Applicant must be able to service both loans.
- Guarantor will need to be able to service limited guarantee in-case guarantee is called on and must have at least 20% equity left in property after the guarantee loan is added. Guarantees’ security can be an unencumbered property or as a second mortgage with some lenders.
- Save money by avoiding Lenders Mortgage Insurance
- You do not need genuine savings.
- You do not need a deposit, allowing you to buy a home now
What do lenders look for in non genuine savings or low deposit loans?
- Stable employment: In most cases you must have been in your current job for 12 months.
- A good income: Lenders look to strong employment in a stable industry.
- Reasonable asset position: Your asset position relative to your age & income is important to lenders and as such the combination of your current debts e.g credit cards, personal loans, car loans should not be more than your hard assets (Cash, Cars etc) to put you in a negative position.
- Rental History: Funders will require copies of rental history to see that commitments can be made on time.
- Security: Funders and Mortgage insurers will want property to be located in Capital City or Major Regional area in good condition.
- Clear credit history: Must have a clean credit file with very few enquiries and with no arrears on your bills such as rent, credit cards, personal loans and other debts.