Newbie Q: 10% deposit @ auctions

[Spongy13]

Hi everyone,

Newcomer to the forum and I am very new to the process of purchasing a property.

I am based in NSW and was wondering whether the 10% deposit cheque required at the end of an auction is required to be under the purchasers name?

Reason I ask is that my folks will be putting up the 10% deposit since they have a cheque book so I just want to make sure this won't cause any dramas.

Thanks in advance!

 

[alexlee]

The agent won't have an issue with it. The question is, will your bank be willing to lend to you if the deposit isn't from genuine savings?

 

[Spongy13]

Thanks for the quick response!

Spoke to our broker who mentioned that borrowing 80% or less usually means genuine savings are not required.

 

[D.T.]

Thanks for the quick response!

Spoke to our broker who mentioned that borrowing 80% or less usually means genuine savings are not required.

Using cash for the remainder or equity from another property?

 

[Brady]

Thanks for the quick response!

Spoke to our broker who mentioned that borrowing 80% or less usually means genuine savings are not required.

CBA <85% no genuine savings required.

 

[Shahin_Afarin]

Hope you are not planning your portfolio (especially the first purchase) on whether or not a lender will take genuine savings for not. Step back, think long term and then work backwards. This may mean you need to go 80%, 88%, 90% or even 95% on the first purchase - let the broker figure out how he can make it work to your needs.

 

[Terry_w]

If the cheque is coming from someone other than you make sure it is properly documented - loan or gift? Even if you will be reimbursing them in a few days document it.

 

[Aaron_C]

The agent doesn't give two hoots. A lender would care only if LMI is involved with genuine savings as a requirement but even then it's not a big deal if you already have genuine savings elsewhere.

 

[Propertunity]

...I am based in NSW and was wondering whether the 10% deposit cheque required at the end of an auction is required to be under the purchasers name?

Money is money, the agent does not care. It is not a requirement that it be a personal cheque in your own name.

 

[china]

As long as the cheque does not bounce, no one cares. Many have bought properties for their self managed superannuation funds or family trusts in various names.

 

[Sean M]

I think Shahin has a good point. Step back for a minute and think about your overall property plan. Is this going to help you or hinder you.

If you are comfortable with what you are doing and have all things documented then maybe your one step closer to making your decision.