All Topics / Finance / Can a mutually signed contract of sale be a proof of deposit when applying for loans?

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  • Profile photo of ToMatOzChito
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    @tomatoz
    Join Date: 2011
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    August 17, 2011 - 6:53 pm

    Hi all,

    My questions seems a little bit stupid but can anyone please answer it?

    I know the normal procedure to buy a house is to get a loan pre-approval first before shopping for houses.

    But what if I have found a house that I really love, the vendor accepts my offer and signs the contract of sales with 10% deposit paid (or 15%), will the lender accept it as deposit when I apply for home loans?

    Hopefully my question is clear enough. Thanks!

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    August 17, 2011 - 9:42 pm

    Yes.

    However, if the deal involves LMI and requires you to demonstrate 5% genuine savings then you’ll have to provide proof that you had the 5% kept over a period of time (ie it wasn’t gifted). However, there are some lenders that will do high LVR loans without genuine savings.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Mick CMick C
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    @shape
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    August 18, 2011 - 8:16 am

    Yes- because it’s your money to begin with…

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of TerrywTerryw
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    @terryw
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    August 18, 2011 - 10:49 am
    Shape wrote:
    Yes- because it's your money to begin with… Regards Michael

    Or is it?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of ToMatOzChito
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    @tomatoz
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    August 18, 2011 - 1:04 pm

    Thanks for the replies, guys.

    Shape wrote:
    Yes- because it's your money to begin with… Regards Michael

    No the money is a gift from my family member, does it affect the loan approval decision?

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    August 18, 2011 - 1:16 pm

    As above, you must prove to the lender that you have the discipline of saving not just drawing upon others to reach the deposit requirements.

    Profile photo of Mick CMick C
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    @shape
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    August 18, 2011 - 2:44 pm
    chito.tsui wrote:
    Thanks for the replies, guys.

    Shape wrote:
    Yes- because it's your money to begin with… Regards Michael

    No the money is a gift from my family member, does it affect the loan approval decision?

    Alright in that case, it’s a diff situation…it’s not your money/ Genuine savings.

    1. Apply to a Non-genuine savings lender – rates will be higher UNLESS your LVR is under 80%

    I would apply for finance first before signing for NGS loans.

    Also what LVR are you going for?

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Post Count: 5,069
    August 18, 2011 - 9:55 pm

    Homeside and BWA will do a 90% lend without gen savings – should be the same rate.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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