My fiance and I are considering the purchase of our first home – we plan to do this and be owner occupiers and intend to expand into investing in the not to distant future. We have our sights on a property and have begun to think about financing. We had planned to try and raise a 20% deposit on our first property but the opportunity we have found is in our opinion a bargain so we are looking at a 90% loan (including the FHOG in the 10% deposit). The price is 85K and while the place seems like a bargain it does need some extra work from which we hope adds some value that we can add to savings for deposits on further investments. Could you please give me your opinion on possible lenders and options for financing additional work to the property. This will be a big help as it will allow us to put things into perspective.
Many thanks in advance.
Apples81.
Apples,
Regardless of the lender if you want to borrow OVER 90% you will need to show consistent savings over the last 6 months to a minimum of 3% of the purchase price, so $2550.
Unless you go for a 90/10 product which means maximum LVR of 90% but no genuine savings requirement, funds for 10% can come from anywhere. Some major banks have this product, including NAB (Homeside).
I would also need to check you can get LMI in your postcode – and for whatever the property type is. If you borrow up to 95% of the value of your propery (assuming it is OK with the Mortgage Insurers), it may cost you a few hundred more dollars for the premium, but ultimately it will leave you with more cash in hand for renovating the house.
Pretty much all lenders will lend 90% but it all depends on the postcode and sometimes the property type. You can narrow down the lender by figuring out what sort of loan product or features you need, and also whether you need a non-genuine savings product.
For a 90% deal on a property at $85000 the LMI Premium will be around $820, assuming postcode is ok.
Liz
Mortgage Lender
Consider ANZ – they will allow you to borrow up to 95% (depending on postcode) and also borrow the LMI. This will leave you with more of your deposit which may come in handy with the reno!
Have fun.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
You will actually have funds from the grant left over in your pocket of around $1000 at settlement with all of your costs taken into account.
Not bad ey?
Liz
Mortgage Lender
Thanks a lot to all of you. That has been a big help.
Cheers,
Apples81.
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