Genuine Savings - VERY IMPORTANT

By Dave Lamari

Since the Economic crisis really took hold and banks began their panic, they have all taken on the strong requirement for Genuine Savings.

This requirement helps the bank determine your ability to 'knuckle down' and your general determination to own a home. As well as this it helps see you are including some 'skin in the deal', that is you have something to lose as well if you cannot make the payments.

Most banks now, with very few exceptions, require a savings of 5% of the purchase price. This needs to be made up of legitimate savings and cannot be made up of gifts, lump sums (selling a car etc) or borrowed funds (credit card draw) to name the main culprits. The only exceptions to this is if the contribution/gift/lump sum is very large and can make up around 10%-15% or more of the purchase price. That is because it leaves the bank with such a strong position (a lot of 'skin in the deal' from you).

As this is such a solid requirement for the banks these days, it is best to have a chat about these requirements. As always though, if you are not quite ready yet, I am more than happy to show you what you need to do to get there.