Forum Replies Created
It really doesn’t matter what LTV you kend people as long as they keep paying.
Think about it…you lease a car for $30,000 …the next day its worth $28,000 and you owe $29,999. What happens ??
Do the wheels fall off,,,do they kill your first born son??
Why are some people so caught up on the LTV???
Kay Henry…if you borrowed 90% and the thing fell 10% you would still have no equity …what is the difference…some logic applied on this forum is outstandlingly bad.
If prices are falling you can’t expect to build equity regardless of you original LTV…think long and hard about it.
Rob….sorry to say but only parts of your view on securitisation are correct. I’m not trying to be a smart arse ..only handing on knowledge.
Firstly…the bonds are structured/sold once the pool of mortgages has been collected….thus the investors know what loans are in there and can make a judgement on the creditworthness of the pool.
Secondly….As for capital adequcy requirements…that is one minor reason for securitisation (for some lenders) but not really the major one and under Basel II it will be less of a reason. Note: Liberty/ Bluestone/ RAMS etc are not subject to Capital Adequecy.
thirdly…some lenders actually maek more money once a loan has been tipped into a securitisation pool as the cost of fudns is ofetn lower in the RMBS market than it is in the warehouse lines that many lenders have.
forthly…I stand by my original comment that any laon can be securitised.
There seems to be a view that only the banks use securitsiation …in fact they were about the last lenders in Australia to do so.
Keep in mind that in 1992 David Bowie securitised the royalties from his record sales !!!
ING don’t securitise but CBA does….the lending criteria from a group is usually based on the profile the lender whats to take in the market as there are no real limits to what can be securitised.
APRA do penalise Banks for high LTV loans they hold on balance sheet unless they get them insured.
Most loans that are less than 80% LTV that end up in securitised structures are insured by the lender themselves via an LMI provider whereas with the >80% stuff they sting the borrower for the premium to the LMI company.
Liberty, Pepper and Blustone all securitise ……as do most of the 100% LTV lenders ……so as you can see LTV or credit defaults do not limit where the loans are funded.
Being a ‘securitised lender’ (sic) has very little to do with the restrictions on the products a lender offers. Any loan can be securitised.
Just about all lenders do some level of securitsiation and some lenders that are referred to as private lenders on here are actaully securitised lenders.
Without singling any person out and trying not to be mean ….I would say there are many terms and labels thrown around on this forum to describe wholesale sructured finance proceedures that are wide of the mark.
Maybe look at buying an anuity or dsome other from of investment from one of the invesment managers for say $100k that is ‘assigned’ to him. He will hold that as the ‘deposit’ but it may not breach the $$$ amount he can recieve. Then you can make the mthly payments to him from then on.
Most lenders take the lending valualtion as the lower of the purchase price or external valuation.
There is a legal definition of valuation which in essence states that purchase price = valuation
Mrs ezi…there are many many inaccuracies in your post regarding how builders lend 100% against their properties. They cannot overprice the property and hide the costs in the purchase price…i don’t wish to get into a slanging match over this but you are wrond and I suggest you rethink your comments.
As for your comments on you can’t get something for mothing that maybe true but lending somebody 100% of a house is not a scam as you suggest.
PM me if you wish to continue with your uninformed statements but don’t spread more rubbish on here.
This concept of claiming back LMI is very much against what I have seen. OK people seem to be doing it but given it is a once off fee for a 25 yr loan and the risk is in the early stage I can’t understand why any smart insurer would pay it back.
There are many differnces between a broker and an originator…but many people miss use the originator label.
LMI is a generic term….StGeorge have ther own insurance compnay so they charge a fee to insure interantally
A few points:
They are not a private lender !!!
They are not funded by a master buider…they are owned by a building firm, which is a differnt thing!!! (trust me on this)
They are strict on borrower profile and employment type (PAYG only)They also advertise on the front page of the Saturday Domain section, I’m suprised more people have not heard of them.
That list is not extensive and there are others not mentioned.
Any lender advancing 100% or more will expect a pretty good employemnt and income position…keep in mind they are looking more at the strength of the actual borrower, whereas many banks and sub prime lenders who are really lending aginst the asset (being the property) with a slight regard to the individual and thier creditworthiness.
You are the mortgage expert but you don’t know the name of the lender who lends more than 100%???
They are not a private lender and they are not liberty.
They advertise on radio in Sydney, Melbourne and Brisbane everyday…I’m suprised you have not heard the ads.
Not all 100% loans require LMI, however anybody who lends you 100% will (and should) look closely at your application …would you really want them to lend you the money if you can’t afford it??? (think UCC wording as well)
Incorect St George are not the only lender who will advance 100% without true savings….look a bit harder…there are other lenders doing 100% or >100% loans.
acey: it doesn’t matter if you put 0% deposit in or 20% deposit in and the value goes down you still have less equity in that house to borrow off…so why put any deposit in?
Have I missed something?
“Let’s see – many Australian property markets are very slow, flat or dropping slightly at present…you borrow 100%.”
OK lets say you borrow 100% of $100,000 and a month later the property market has fallen by 5% so your house is worth $95,000.
SO WHAT…its not like you are forced to sell at this point or your chickens will stop laying.
Think about a car lease you borrow $30,000 for a $30,000 car and the next day the car is worth $28,000 …nobody takes the car away from you.
There are many 100% loans in the market already for both investors and owner occupiers…there are loans that will lend you more than 100% to cover stamp duty etc. And these do not involve parnet guarantees or cross collaterisation between propertes…..do some research and you will find them.
Trying to hoodwink a bank into lending you more is not good practice.
