Leveraging Inheritance and Genuine Savings for Homeownership
In the journey towards homeownership, understanding the concept of genuine savings is crucial. It's not just about having funds in your account; it's about demonstrating to lenders your financial discipline and stability. This article delves into the nuances of genuine savings, particularly focusing on how inheritance can play a part in this equation and the role of genuine savings in securing a home loan.
Genuine savings are a key indicator for lenders, showcasing a borrower's ability to save and manage money over time. It's a testament to your financial responsibility, often influencing the lender's decision in approving a home loan. But what is genuine savings exactly? It's the money you've saved or held in your account for a set period, typically three to six months, and it can include funds from regular deposits, a consistent savings plan, or certain types of investments.
Lenders scrutinize genuine savings to ensure they reflect a borrower's true financial habits. This means not all funds qualify as genuine savings. For instance, a windfall, a gift, or the proceeds from selling an asset might not count. Lenders want to see that you've built up these funds over time, indicating a pattern of saving and financial stability. Effective financial planning can help ensure your genuine savings align with lender expectations.
Inheritance can be a significant boost to your homeownership journey, but it's nuanced when it comes to qualifying as genuine savings. If you've recently inherited funds, lenders may require a waiting period to consider these funds as part of your genuine savings. They may also request documentation, such as a will or probate, to verify the source of these funds.
Combining inheritance with genuine savings can strengthen your home loan application. Consider depositing your inherited funds into your savings account and letting them sit for the required period. Continue adding to your savings regularly to demonstrate financial discipline. This approach not only bolsters your genuine savings but also shows lenders a consistent saving pattern, enhancing your credibility as a borrower.
While traditional genuine savings are preferred, some lenders may consider non-traditional forms under certain conditions. This might include rent payments, provided they're regular and can be verified, or a gift from a family member, if held in your account for a set period. Knowing how lenders view these funds can help you plan and present your financial situation effectively.
Navigating the complexities of genuine savings and home loan applications can be daunting. This is where financial advisors come in. They can guide you through the process, from understanding lender requirements for a genuine savings home loan to optimizing your financial profile. Their expertise can be invaluable in turning your homeownership dream into a reality.
Genuine savings play a pivotal role in the home loan application process, reflecting your financial discipline and stability to lenders. When combined with an inheritance, they can significantly bolster your application. However, it's crucial to understand lender requirements and present your financial situation effectively. With the right approach and professional guidance from a mortgage broker, leveraging inheritance and genuine savings for homeownership can be a smooth and successful journey.
A: Genuine savings are crucial as they demonstrate to lenders the applicant's ability to manage finances and save money over time, reflecting financial discipline and reliability, which can increase the chances of loan approval.
A: Genuine savings typically include funds that have been accumulated over time in a savings account, term deposits, shares, or similar investment vehicles. They do not usually include gifts, tax refunds, or borrowed funds.
A: Zippy Financial can guide individuals through the home loan process, offering expert advice and support in finding the right loan product that suits their needs and financial situation, especially focusing on leveraging genuine savings to secure better loan terms.
A: Yes, while having genuine savings can enhance loan approval chances, there are various loan products and lenders available that may accommodate individuals without genuine savings, depending on other financial factors and securities.
A: Having a will demonstrates a level of financial responsibility and planning. It reflects an individual's proactive approach to financial management, which, coupled with genuine savings, can be favorable in the eyes of lenders when applying for a home loan.
A: Consulting with Zippy Financial provides access to expert advice, personalized service, and a range of loan options from various lenders, ensuring that individuals find the most suitable and competitive home loan based on their unique financial circumstances and preferences.
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Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilizes her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
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Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
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