Genuine savings, what is it?

Genuine savings is a requirement from most lenders for borrowers who want to lend money over 85% or 90%, dependant on lender, of the value of the property.

Genuine savings requirement means that a lender wants to see that the borrower has the ability to save funds over a period of time. It is sort of like the lender wants to see the character of a borrower and wants to see if the borrower ahs the ability to save some funds and get into the habit of putting money aside to repay their mortgage.

Gone are the days of the 100% loans and 105% lenders

The maximum some lenders will borrow is 95% plus capitalize the lender mortgage insurance on top of that.

Genuine savings must be evidenced over 3 months in the following way:

1. Money held in a bank account over 3 months.
   There must be evidence of periodic savings deposited into the account. Most lenders will not accept a lump sum deposit and nothing else over the next few months.
2. Gift – this must have been held in an account for a minimum period of 3 months
3. Term Deposit – this must have been held for a minimum period of 3 months
4. Cash -acceptable only if placed in account for a minimum period of 3 months
5. Shares – these must have been held for a minimum period of 3 months
6. Equity in an existing property

Some lenders are less stringent than others and only require 3% genuine savings.