I'm applying for a loan on an investment property with a 15% deposit and no mortgage insurance.
I noticed in one of the boxes 'Interest Only (max 5 years)' – what happens at the end of 5 years, reverts to principal and interest?
Anyone else going the 15% deposit with no mortgage insurance? Any benefits or negatives to this over a 20% deposit loan?
It reverts to P&I – but you can often change it back to another IO term.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: info@passgo.com.au
Thanks for the reply Jamie.
Some lenders won't allow you to continually apply for new IO terms, but generally you can just refinance the loan which will open up new IO terms.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
In saying that the product is not particularly flexible so after 5 years you may well be paying P & I repayments.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Alex,
Are you considering other features of the loan which might help you pay less over all in the period of 5 years?
Hi Arun
The security is a block of units so we have moved on from Citibank.
Not a matter of other features more a matter of getting the deal done at the right lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Alex,
If you are considering of option of 15% or 20% deposit, then It may be worth while to consider total cost of funding over the period of 5 years.
I agree if you have only option of 15% deposit then the city bank is more appropriate then others as it does not attract Lenders Mortgage Insurance.
Arun as mentioned it is a block of units and not mortgage insurable.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Dear Alex,
I have not seen in your Question Block of units as security. Did I miss something?
Yes i am doing the deal for the client at the moment so some inside running.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Dear Alex,
Sorry as the question was incomplete I was only able to answer based on information provided.
All the best for the deal.
Thanks for the replies. Not going with that one as it's metro/capital cities only.
Dear Alex,
If you are going for 20% deposit then there are many lenders and most appropriate lender is easy to find.
Dear Alex,
Just trying to know what was your final option, 15% or 20%.
Arun we went 20% in the end.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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