I’m looking to buy my first property, an IP as soon as possible.
Initially I was considering 95% LVR, but after reading other posts it seems there is more risk in the loan application being knocked back, so I may go 88% LVR + capitalise LMI.
I plan to buy an IP for around $330,000
So I need 12% deposit. How much genuine savings do I need to show is it 3 months or 6 months and do I need to show 12% genuine savings or just 5%, i.e. how much do I need to show and what period of time?
If 95% LVR, then 5% deposit is $16,500 + $10,340 stamp duty + $1,500 solicitor and misc costs = $28,340
I have around $20,000 in shares which I plan to sell. I still need $8,340. Which will take me around 4 months to save up.If 88% LVR, then 12% deposit is $39,600 + $10,340 stamp duty + $1,500 solicitor and misc costs = $51,440
I have around $20,000 in shares which I plan to sell. I still need $31,440. Which will take me at least 12 months to save up.I am about to start a new job with higher income, how long do I usually need to wait before getting a pre-approval, is it 3 months?
My parents might lend/gift me say $100,000 so let’s say $35,000 towards the deposit and stamp duty and $65,000 towards the purchase price so I could buy a better property for $395,000. Will lenders be ok with this (i.e. get as much loan as the bank will allow me + top up the balance with own money)? Do I need to have this $100,000 deposited into my bank account and how long before the pre-approval/purchase do I need to do this, or do my parents pay it from their account when the deposit is paid and on settlement?
So in this situation is it too risky / too hard to go for the 95% LVR?
Hi Magic
Welcome to the forum and I hope you enjoy your time with us.
Obtaining a 95% lvr is going to be extremely difficult unless you have other property as it won’t score well with the Mortgage insurers.
Certainly if your parents are prepared to gift you a deposit then that will be fine however they will need to sign a Stat Dec stating that no interest is charged on the loan and it is non repayable.
There is another alternative which might be more suited but without knowing all the facts and figures it is hard to say.
New job shouldn’t be an issue with many lenders depending if there is a probationary period attached to the role but even then could get around it with a few lenders.
Cheers
Yours in Finance
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This reply was modified 10 years, 5 months ago by
Richard Taylor.
Richard Taylor | Australia's leading private lender
Hi Richard, it’s actually for an investment property.
Hey Magic,
You’ll only need to show 5% genuine savings via a three month transaction statement within LMI territory for most lenders, some won’t require this sub 90%.
Changing employers also won’t be a huge problem if its a permanent role. if you have a probationary period most lenders will want to see you off it first.
Lenders will take into account a 100k gift from parents, they will generally want to see it in account with a signed dec from parents stating that the funds were a gift.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Do I need to save the whole 5% in only 3 months. It will take closer to 6 months to save 5%
No, thankfully you will only need to show that you have saved over 3 months with the end balance being 5%. :) For example in your hypothetical purchase of 330k you would need to show a bank statement showing an increasing/steady bank balance with an end balance of 16.5k. In reality you would need to show a higher balance of course for funds to complete – so you can cover stamp duty/other govt charges.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
No 5% of an extended period is fine.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Do I need to save the whole 5% in only 3 months. It will take closer to 6 months to save 5%
All good – there’s no set time limit after the three months. Just continue making contributions to your savings and it will demonstrate a capacity to save – and therefore an ability to meet repayments on your loan.
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: [email protected]
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This reply was modified 10 years, 5 months ago by
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