What is Genuine savings?
Genuine savings is savings in an account that is slowly increased over 3 month period or left in an account for 3 months…untouched
The deposits can’t generally be greater than 5 percent. of the amount necessary to achieve so you can’t have a deposit of $5000 in the middle of the $25,000 savings…or even $2000
So things like tax refunds and selling a car are not readily acceptable…
There are a few banks that allow rental deposits to overcome this…IE they have to be renting with a registered real estate for between 3 to 12 months and be able to provide a letter or rental ledger for this….no private rentals allowed unfortunately
The bank looks at this savings as showing you can consistently afford to put additional cash away and can therefore afford a home, they look at the 5 percent. savings as “HURT MONEY” this is you will have to forgo somethings in order to sacrifice for this home savings and potentially to keep a home…
There are lenders out there who will lend at 95 percent. without genuine savings however these clients must be aware they represent a higher risk to the banks than those that have saved and will pay a slightly higher rate and lenders insurance as a result.
Clients must weigh up the payoff to have genuine savings or a get the house they want right now…….which could potentially be another discussion altogether…
Let me know if you have any questions and please…have an awesome and SAFE weekend