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  • Profile photo of shay1975shay1975
    Member
    @shay1975
    Join Date: 2008
    Post Count: 6
    April 29, 2008 - 12:04 am

    Hi,
    Prob a simple answer but have not been able to get one yet. Basically I am looking to refinance using the equity in my unit.
    I have gotten pre-approval for 630k which they say is 95% LVR, meaning 15k roughly on top of this for LMI.

    My question is how are they working out my LVR, because I don't want to pay the LMI? So either I want to reduce the amount that I can borrow to 80% LVR and avoid LMI or wait till I have saved enough till I reduce the LVR to 80%.

    There is around $100k equity in my unit which is being used to calculate this somehow. I understand what LVR is and LMI and so on, I just don't get how they are working it out using the equity. If I know that, then I can work on the figures myself.

    Thanks in advance

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    April 29, 2008 - 3:23 am

    LVR is just loan divided by value.

    So if you loan of $630,000 is 95%, the value must be around $663,158

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of shay1975shay1975
    Member
    @shay1975
    Join Date: 2008
    Post Count: 6
    April 29, 2008 - 3:59 am

    I understand that, but does that mean the max I could borrow to avoid LMI would be around 529k (80%). I don't want to dip into savings, but use the equity only to invest and I want to avoid the LMI as it is a waste of money.

    I have just been trying to figure how they came to this max value I could borrow from the details given to them
    Property valued at $600k they told me.
    Loan value at 472k
    Offset 50k say

    Based on that, the worked out max I could borrow was 630k at 95% LVR. Am I making sense?

    Thanks in advance

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    April 29, 2008 - 1:34 pm

    Hi

    I am not  exactly sure what you are saying, but basically you can borrow up to 80% of the value of the security without incurring LMI.

    so if your property was valued at $600,000, then max loan without LMI would be $480,000.

    Maybe the figures given by the bank are a bit out as they have calculated the 95% loan and then added the LMI on top of this figure.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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