Have you borrowed money for your home loan deposit?
We can help!
Even if you don’t have enough genuine savings to buy a property, it can still be possible to achieve your dream of buying a home!
What are genuine savings?
When you are trying to get a home loans most lenders will want to see evidence of genuine savings as part of the deposit that you will be contributing to the purchase. This is because they view this as a good indicator of your likelihood to repay a home loan.
Genuine savings can be:
- Regular savings in a bank account over at least 3 months
- Funds held in a term deposit for at least 3 months
- Equity in a current property you own
- Depending on your loan to value ratio (the amount you want to borrow against how much you property is worth), you may be able to rely on a gift from your parents or historical rent paid.
Can I borrow my deposit?
As mentioned above, most banks will want to see that you have genuine savings as part of your deposit. However, some lenders are a bit more flexible and allow a deposit to be made up by utilising:
Some lenders will accept a personal loan to complete the overall funding position (e.g. to cover stamp duty or fees).
Where a parent uses equity they have in their home, to secure against yours. This is a great option as it eliminates the need for you to have a deposit at all and you can borrow the costs associated with the purchase (stamp duty, legal fees, bank fees).
There are some lenders that allow you to use funds borrowed from a family member. However this is very lender specific and approved on a case by case basis.
If you have been renting for the last 6-12 months, some lenders will let you use evidence of historical rent as meeting the genuine savings criteria.
Borrowed deposit home loans can prove challenging when it comes to buying your new property. It is advisable that you save the required 5% deposit. However, if that’s not an option, we work with many lenders and can help you find the most viable solution! Apply online and one of our team members will contact you.