This case study is based on real clients who had issues getting their loan approved due to non-genuine savings. For the purposes of this article we shall call them Romeo and Juliet. The names & certain details have been changed in the interest of privacy for the borrowers, however the key facts and how we were able to solve their problem remain the same.
Romeo and Juliet had a deposit for their first home but it was not saved in an Australian Bank account. This was considered by their banks as a non-genuine source which generally requires a a larger deposit.
Lenders like savings, particularly for low deposit loans, to be what is commonly known as genuine savings. This shows the lender that applicants like Romeo and Juliet have the ability to save money over time, which in the banks eyes means that it is more likely that they are able to meet their loan repayments.
In this case Romeo and Juliet had bought gold a number of years ago and had recently sold that gold bullion to fund the deposit for their first home. For most lenders, the selling of shares or another home is acceptable as genuine savings. However other assets such as selling your car or gold as in this case, are not usually acceptable to all lenders.
Digging deeper we were able to find a transaction record for the savings used to purchase the gold, and we were able to show that they had owned the gold for more 3 months.
We could have gone to a number of different lenders in this situation as there are quite a few that will allow the selling of gold to be considered genuine savings. In this case Romeo and Juliet’s lender did not and they were very keen to stay with their bank due to a long term relationship with them and also the attractive interest rate the bank had on offer.
We were able to put together a case to the lender as to why it should be considered and be accepted outside policy. Romeo and Juliet got the outcome they were looking for, and were able to stay with their bank to purchase their first home.
We can often work with our clients bank and find a solution that their own banks may have initially declined.
If you would like us to have a look at your situation, please get in touch with us about our obligation free mortgage broker service.