I feel like this is a silly question, but I still want to clarify anyway.
I put away $300 a week into Raiz as my way of saving. Will lenders view it the same way or is there some kind of technicality where savings has to be deposits into a bank account?
I also sold off some shares at a profit to go towards a deposit. Will this be treated any differently?
Ah, ok. That helps put things into perspective. Thanks!
Yes, the servicing is a pain in the back side.
If you held the shares for more than three months before selling, then the proceeds are considered genuine savings. This is important if you are borrowing over 90% of property value as both Genworth and QBE want to see genuine savings 5% of purchase price at this LVR.
Also putting away $300pw into Raiz will support your application - while affordability is the major factor there are other things that lenders look for. Regular savings pattern is a good help - it shows that you are used to saving $1200pm and if you're paying rent at the same time, it just shows that you're used to making that big commitment each week. Makes it easier to get the loan through if you can show that you're used to putting aside the equivalent of a loan repayment, whether it's into Raiz or rent or savings account or a combination of these. It's what's called a mitigant. Credit score a bit low? Employment history a bit patchy? A good savings record can help. Google The Five C's of Credit.
… and that's probably more information than you were looking for….
That basically cleared up all the confusion I had! Thanks!
It'll be classed as an investment on your assets assessment. If you sold and moved some to cash it is cash. Some end outcome really. Most people struggle with the servicing assessment (i.e. income) not the assets