In short, the answer is yes. You can apply for a home loan, to purchase a property, with a gifted deposit.
Loans with non-genuine savings are scrutinised quite closely, so be prepared to answer a few more questions before you submit your application. As with any application for finance the lender will want to determine how financially responsible you are and how likely it is that you will repay the loan.
Loans requiring non-genuine savings generally command a higher interest rate. This is what we call a ‘for now’ loan. Getting your foot in the door to be able to pay down the debt and grow equity in your asset. Down the track you can always look to refinance to a more competitive product with a lower interest rate.
Exactly What Is Non-Genuine Savings?
- First Home Owners Grant
- An Inheritance
- Financing – personal loans or borrowings
- Advances on wages or commission
- Tax refunds
- Sale of an asset – For example a vehicle
When is Genuine Savings Genuine?
- Savings in an account for 3 to 6 months
- Existing equity in property
- Proceeds from the sale of a property you own
Gift Letter/Statutory Declaration
- The name of the person gifting the funds
- Their relationship to you – the gift must be from an immediate family member as previously stated
- Your name – the person receiving the gift
- The gift amount
- The letter must state ‘This amount is a gift and as such is non-repayable’
- Must be signed by the gift giver
- Some lenders (but not all) require the letter to be in the form of a statutory declaration and witnessed by a Justice of the Peace