- In Bee Savvy - Getting the most out of your loan, First things first - Steps before applying for finance
Saving up a 20% deposit to buy a home can be difficult for some people. Luckily there are options out there for home buyers if their deposit is less than 20%. However, lenders don’t tend to advertise the requirements for small deposits. This leaves people in a situation where they apply for a home loan, and are declined, because their deposit doesn’t meet the criteria.
Lender rules that apply if your deposit is less than 20%
All home loans have rules and criteria that you have to meet, in order for a lender to approve you. Extra rules apply to deposits, especially when these deposits are small.
When a deposit is less than 20%, a lender is likely to have requirements about where this money came from, how you’ve held it, and how long you’ve held it. Some lenders also want to see that you’ve kept on saving, even when you’ve finished saving your deposit.
If you have a deposit that’s under 20%, lenders will often require that you have “genuine savings”. What does this mean? Well, that’s where it gets tricky. The meaning of genuine savings varies from lender to lender. And they often don’t advertise their definition, and how it applies to their home loan products.
For example, a lender may be offering a great rate, for applicants whose deposit is less than 20%. But what may not be immediately obvious, is that they may not accept deposits that are gifts from your family, proceeds from selling assets such as a car, or a bonus that you’ve earned at work.
Even if your deposit has come from the right source, they may have rules about how often you’ve added to the deposit, and how much you’ve added each time.
And with some lenders, it can get even more complicated!
Bee Finance Savvy – getting your deposit right before you apply
Failing to meet just one of a lenders’ rules about deposits can see your home loan application declined. With a mark on your credit file, it can be harder to apply again with a different lender.
So it’s important to make sure you apply to the right lender, and that your deposit ticks all the boxes, before you
apply. That’s where Bee Finance Savvy comes in. We know our 30+ lenders rules inside and out. Even though these rules are changing all the time, we stay up to date with them.
This lets us work out which lender best suits each one of our clients, including whether their deposit meets that lender’s criteria.
Our upfront assessments are 100% obligation free, so why not get in touch today. Our friendly broker Desiree is here to answer all your questions, and help you on the way to reaching your goals.
If you’d like to hear from just some of our satisfied customers, take a look at our reviews on WOMO https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda