Genuine Savings for a Home Loan Deposit
Saving for your first home can be a hard job. It takes commitment, time and dedication to get that deposit together.
So, what do banks look for?
Generally, financial institutions require borrowers to be able to demonstrate that they can be good savers. Home loan repayments need to paid by the due date. Showing regular savings deposits into your bank account will give the bank more confidence that you will be a good risk to lend money to. The best way to show this is to open a separate savings account and set up a regular automatic transfer of money into this account and not take this money out.
A small number of banks will allow you to show your rental history statement for a period of 6-12 months. You can obtain this from your licenced real estate agent. This way, the bank can see you are good at paying your rent on time. If you show this form of genuine savings, you still need to have a deposit to put down on your new home. Some people sell a car or a bike, while others are gifted money from their parents.
Each financial institution looks at home loan deposits differently. The minimum deposit required is 5% but most are more like 10% of the value of the house you want to buy. Depending on the purpose of the loan or your individual situation, some banks will require a bigger deposit. The best thing to do is make time to come and talk with us about your requirements and we will let you know what might be possible.