I applied for home loan early last year with a mortgage broker and got knocked back on the grounds i had not been working in my job long enough. Soon after this all the banks tightened there lending criteria and i stopped saving for a and had a few holidays. I have just over 5% deposit for 300k house and this is the limit i wanted to buy into. Just wondering if any financial guru's with there head in the game know what my chances would be of getting a home loan with 95% LVR with mortgage insurance included. I have been working with the same company for over a year and a half now, have a lease vehicle, a small personal loan (2k), credit card (2x4k) and name on a car loan with my gf (10k). I can service the 300k no problems(income = 100k) and have a pretty good credit history, but still a bit worried they might knock me back. This will be my first home and i intend on using FHOG and will be my PPOR. What kind of loan structure should i be looking for if my plans were to live in the home and renovate for the first 2 years and then rent it out after that or would i not get much of a choice considering the high LVR? I know the more deposit the greater chance and better off but we need to get out of the rent game here (mt.isa) as the rents greater then our mortgage would be. Any help would be much appreciated.
Jeff
I think you should consult loan modification attorney.
Do you have a CBA credit card, car loan or debt facility?
If you have an existing debt with CBA (or unused credit card) and have held it for more than 6 months; you can get 95% plus Mortgage Insurance (up to max 97%)
CBA approval includes automatic Mortgage Insurance approval for loans under 1M.
I think at 95% lvr + LMI in Mt Isa you have buckleys given your potential Credit score and unsecured liabilities.
I would focus on discharging these first as it will improve no end your chances.
Richard Taylor | Australia's leading private lender
Richards got a point re the personal debts however be careful. If you have a CBA debt and repay it; you are back to 90% as you no longer have an existing debt facility. Each bank defines an existing customer slightly differently.
Who are your existing debts with?
What savings do you have?
Is the savings genuine savings?Re. credit score. One of the worst things for a credit score is a purpose being ’refinance' or 'cash-out'. If yours is a 'purchase' and the existing debts are outweighed by assets you might not come up too bad.
I don’t know about the Mt Isa issue (at least there is no risk of tsunami…).
Banker just had a deal declined by CBA as they said they had too high a concentration of current lending in the Town.
Thankfully NAB swallowed it up.
Getting a real problem in the Qld regional towns.
Richard Taylor | Australia's leading private lender
It depends on the strength of the deal, how well you are able to show servicing coverage as well as the other factors Richard mentioned. From what you said with a $100k income, you should be able to easily chow service coverage. I recently obtained finance for a Mt Isa PPOR with a client just in the job 1 month.
Even though you have just 5% savings, the FHOG will assist. It will be about selling you the person and deal to a lender, see a good broker to assist.
It will probably need to be with a major lender as the second tier and non banks are restricted due to mortgage insurers and post codes at that LVR.
As to structure, I suggest a 30 year loan with 5 year IO facility and a full offset. Use the offset to build your savings to reduce your interest cost while you live there and when you move away and convert it to an IP, pull out your offset savings for your next PPOR or IP or whatever. Also reduce/pay off c/cards and personal debts.
Good luck
Gregthanks very much for your comments and feedback.
My current savings are with Westpac, I have held them for 3 months from the sale of a boat I made some money off and also my own input so around 5k input +11.5k from the boat. My ccard is with westpac and also a gecard for the interest free amounts. I have my car on a lease which runs out early next year, and a 3k owing on a personal loan with CUA. I am on the title of the loan with my gf so we could get her a car last year but we are going to try and change the name solely to her before I apply for a homeloan.As i see it I have around 80k worth of assets including my car, toys and personal affects.
My debts are = 3k personal loan, 8k creditcards,
Savings = 16.5k (will be genuine as of 7/7Tax is coming up also and i was going to try get this in asap and use it to pay the personal loan off. Just trying to set myself up in the best possible position to improve my chances. Is there any recommendations anyone has?
I talked to RAMS a few weeks ago and they said they were doing 95% LVR + LMI ontop (is referred to as capped?), and they are a westpac company who I bank with.
Richard, was that declinded loan in mt.isa or just a regional town?I’m pretty sure RAMs will need the mortgage insurer to sign off in the deal:- therefore it’s not going to be their call. You need them to check the post code lists the insurers have to see if they can do 95% in Mt Isa.
Shame your with Westpac:- they’re very tight however do have room in their policy to lend 95% to existing clients. If they approve any 95%ers is a different story.
If you are buying at 300k with 5% deposit, do you have a family member that could provide a limited guarantee to keep the LVR down?
unfortunately not. My folks just bought a new place and I'm doing it all off my own back. I have a friend who works for westpac doing the home loans there in town, she said they were not lending more then 90% in mount isa atm.
As Greg mentioned i also done a 95% lvr for a FTB in Mt Isa who had 1 default and took some doing but we got it over the line and has settled now.
Many of the lenders are back to 90% max.
Had a couple of 95% approved recently for existing Westpac clients but as Banker mentioned not easy meat.
Richard Taylor | Australia's leading private lender
Banker wrote:Do you have a CBA credit card, car loan or debt facility?
If you have an existing debt with CBA (or unused credit card) and have held it for more than 6 months; you can get 95% plus Mortgage Insurance (up to max 97%)
CBA approval includes automatic Mortgage Insurance approval for loans under 1M.
Hi Banker, So would you be saying if I have a CBA visa card then I could get 95% loan if I have good income?
My Visa is not in debt and never has been, its only used when needed and normaly paid within a few days.
How much is mortgage insurance, say for a $500k house?
I normally buy and hold with 20-30% upfront but I want to do a couple of buy and sells, will there be any exit fees or lower mortgage insurance if I sell within several months of buying.
Cheers
Hi
Try this broker, I have done a few loans with him and still is going through with him now. I find him really helpful. I gave my senario to other brokers and they can't do (i.e. approve the loan) except this guy. His name is James & his number is 9803 3040 his mobile 0403 466 486.
Good luck.
Tina
Tina
Regretfully your friendly Broker will have little or no sway on a lender at a 95% lvr unless as been mentioned before he or she is an existing client or the deal / clients scores well in Credit scoring.
Most deals can be done someway or other as long as the lenders parametres are met.
Richard Taylor | Australia's leading private lender
Touche wrote:HiTry this broker, I have done a few loans with him and still is going through with him now. I find him really helpful. I gave my senario to other brokers and they can't do (i.e. approve the loan) except this guy. His name is James & his number is 9803 3040 his mobile 0403 466 486.
Good luck.
Tina
Hi
I am looking for a good broker at the moment…
Do you mind give me his email please? I need a loan urgentlyThanks for your help
Helen
Keiko,
As a general guide, CBA LMI rates for a loan < $500k and 94-95% LVR, is about 2.5% plus the relevant state stamp duty.
You could expect $12k plus as a once off fee.
To qualify with CBA you will need to be an existing customer and they define this as 6 months at least.
Nearly all lenders have exit fees but CBA is one of the lower ones, I think $700 if discharged within 4 years.Some MI's will refund part of the LMI fee but it will not be proportional so if you are looking at a quick turnover of the property, expect a large hit.
Good luck
GregHelen,
Why not use a broker that supports and contributes to this site?Depending on the state you are in and whether you want face to face service, for instance just on this topic, Richard Taylor is Kenmore Qld, I am in Melbourne. There are others in other states.
If you need a loan quickly, you may need to use one of the non-majors with quicker turn around times.
Good luck with it
GregHi there folks!
I'm pretty new to this site, and have a couple of basic queries I hope someone can solve please?
What is an LVOR, FHOG, PPOR, LVR, LMI, IP, FTB and an MI?
I can't make sense of lots of the above letters without this knowledge.
Thanks & cheers,
LizLiz,
We have all been there, perhaps some of us we not ever cute though!FHOG – first home owners grant, frderal govennment $7k grant for first time home buyers
PPOR – principle place of residence (own home you live in)
LVR – loan to value ratio, a measure of the loan amount compared to the purchase price
LMI – lenders mortgage insurance, paid when a loan is > 80% LVR, a one off fee to provide insurance to the lender
IP – investment property
FTB – family tax benefit, a federal gov't payment to assist families
MI – mortgage insurer (see LMI above)I am not sure that LVOR isn't a mistyping of LVR
I hope that helps.
Greg
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