Deposit to Builder as Genuine Savings

[radnas]

Sorry if this has already been answered

I know this may seem risky, but if I pay non-genuine savings now to a builder to secure a house and land package, will the banks/LMI underwriters generally view this as genuine savings in 3-4 months time (i.e. approval shortly before settlement)?


Cheers.

 

[D.T.]

Sorry if this has already been answered

I know this may seem risky, but if I pay non-genuine savings now to a builder to secure a house and land package, will the banks/LMI underwriters generally view this as genuine savings in 3-4 months time (i.e. approval shortly before settlement)?


Cheers.

Anythings possible. I got loan from my parents plus a personal loan from same bank both get counted as deposit for my current PPOR. If you're only showing them 3 months of statements....

 

[Aaron_C]

Depends on the timeframe.

 

[radnas]

Cheers for the prompt responses.

Aaron_C (others), how does this hypothetical sound:

1. I receive a gift of funds today.
2. I pay funds to builder next week to secure land and house package. Registration and Settlement on land portion is 4 months away.
3. 3 months later, I go to bank and seek approval.
4. 1 month later I settle on the land (assuming I get approved ).

Do you think the bank will consider the deposit genuine savings? Although they weren't genuine savings to start with, they have been held in my benefit (so to speak) for the requisite 3 months?

Thanks for the help.

 

[Aaron_C]

Yeah you can probably get away with that one as a deposit paid 3-4 months ago is considered genuine savings.

 

[radnas]

Good stuff. Will discuss with the banks.

 

[Brady]

Should be an issue as mentioned by Aaron

 

[jonmardell]

Sorry if this has already been answered

I know this may seem risky, but if I pay non-genuine savings now to a builder to secure a house and land package, will the banks/LMI underwriters generally view this as genuine savings in 3-4 months time (i.e. approval shortly before settlement)?


Cheers.

depending on the banks requirements of either 3 months or 6 months genuine savings it would be counted.

 

[Marty McDonald]

I know westpac came out with a specific policy on this as some credit assessors were allowing while others not. Good news is policy is that it IS considered gen savings. Most lenders would view the same way.

A greater concern may be the valuation in 3 to 4 months not being as much as the purchases price. If you are after a maximum LVR 95% / 97% I would caution you to consider the risks of this happening.

 

[tobe]

Cheers for the prompt responses.

Aaron_C (others), how does this hypothetical sound:

1. I receive a gift of funds today.
2. I pay funds to builder next week to secure land and house package. Registration and Settlement on land portion is 4 months away.
3. 3 months later, I go to bank and seek approval.
4. 1 month later I settle on the land (assuming I get approved ).

Do you think the bank will consider the deposit genuine savings? Although they weren't genuine savings to start with, they have been held in my benefit (so to speak) for the requisite 3 months?

Thanks for the help.

Done this exact scenario many times. Be careful, as you most likely wont have a 3 month finance clause, and while your funds will be genuine at that point, there are other things that might tip your finances over....

 

[radnas]

Thanks all.

I am aware of the valuation risks but I will have a sufficient buffer if needed. I am just looking to move fast as land in South-West Sydney is getting snapped up quickly and I'm even more keen to stop paying rent.