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Yes for customers that are in an excellent financial position it is no problem however many of the people that need 95% just don't meet the guidelines. Here in Sydney as well any properties in the Western Suburbs at 95% have to have customers that can walk on water! Genworth in particular is really conservative with the West due to a high level of claims in the last two years.
If you have been in your job for 2 years, your savings is "genuine savings" (i.e. you saved it yourself) and the property you are buying is in a major area then you may be able to borrow 85% with only $699 in LMI. This is a special deal offered by one of the lenders who specifically targets stable customers. If you do this type of loan you can keep more of your funds available to use for future investments.
Very tough to get approval for it though!
If you are borrowing 80% or less then they are relatively flexible. Above 80% as with many (but not all) other lenders the LMI providers make the rules. Their customer service is excellent, their turnaround times are better than the majors and the offset account on their basic loans is excellent. Their interest rates are not market leading however they are close. It is hard to recommend anything without knowing your full situation. They are certainly not a terrible choich, I agree with Richard that you could probably do better.
Hi Rafael,
Depending on the lender it could be done in one of two ways.
1st method: There would be a loan just in your name for $320,000 and a 2nd loan for $40,000 in your name that is guaranteed by your family using a mortgage on their property. This method allows you to make repayments to the guaranteed portion first and keep better track of how much you need to repay to remove the guarantee.
2nd method: There would be one loan for $360,000 with a guarantee from your family limited to $40,000. This is effectively the same thing except there is only one loan account.
As a general rule the family member offering the guarantee must have significant equity in their property. Many lenders put restrictions on pensioners being guarantors or do not allow guarantors that are not your parents (aunts, uncles, brothers etc all unacceptable).
Thanks
