In the last 2 weeks, the banks have toughened up and now want to see borrowers capable of repaying a 95% LVR Home Loan.
Banks now require “5% Genuine Savings”, to be proven by showing 3 months bank savings account statements. All large deposits have to be explained, and Mum & Dad throwing $10,000 into the account is not Genuine Savings. Neither is the First Home Owner’s Grant.
Example: Son wants to purchase First Home worth $400,000. Has good income/job.
Currently lives at home with Mum & Dad. Also has a personal loan which he repays $300pm.
Bank Requires:
a) Personal Loan Statements or credit card statements showing past 6 months repayment history
b) At least $20,000 (5%) in a savings account
c) Last 6 months statements showing a gradual increase in savings, building the deposit. Explanation of large deposits.
If Genuine Savings cannot be established, then the next best option is a 90% LVR Home Loan where you do not have to prove Genuine Savings and Mum & Dad can help out with cash.
To find out more about these recent changes, please call our Plan Assist Mortgage Team on 02 9449 2333.
