“It’s difficult when you’re paying rent and then to accumulate a 5% genuine savings… You’re not borrowing 100%, but you don’t have to demonstrate any savings - but the 5% still has to come from somewhere.”
Mitchell, says the requirement for substantiation of savings in respect of the equity contribution is also waived for loans up to 95% LVR.
“Homeloans is one of very few lenders in the market that can offer a 95% non-genuine savings product. Our focus is on providing solutions which benefit both brokers and borrowers.”
He says that while the concept has been around for a while, few lenders are offering similar products in the wake of the GFC.
“[The product] is quite basic. It’s black and white and that’s probably the good thing about it. It’s great for us to have; it kind of just opens up the opportunity for us to explore another type of borrower…If clients are borrowing 95% to purchase an owner occupied property and have no genuine savings or have obtained the 5% from a gift or a loan, the FlexiChoice NonGen 95 is a great solution.”
The Homeloans FlexiChoice NonGen 95 is available with either a variable or fixed interest rate, it’s purely designed for the purchase of an owner-occupied property and borrowers must have a clear credit history and be in their current employment for a minimum of 12 months - or 24 months continuous employment within the same industry. They must also disclose the source of funds and provide appropriate evidence.