90% with (almost) no LMI for everyone!!!

[Jamie M]

I think it's a great initiative - and despite some of the issues I've experienced with ING, I'm sure I'll be increasing my volumes with them whilst this promo is available.

Sure - it's not a great fit for everyone and it's unlikely to suit most from SS but it certainly has its place.

Cheers

Jamie

 

[Redom]

Thanks Redom and Tobe
Given the mostly negative feedback regarding ING from previous posts and the fact this is only for OO which is mostly going to benefit FHB on smaller loans would you really be inclined to recommend this to clients based on a saving of say 5k?

If that is capitalised over a 30 year loan then the amount is going to be almost insignificant (Roughly $5 a week)?

Depends albanga - plenty of clients walk through broker doors with pretty limited goals through property.

Saving them 5k on their one and only transaction is definitely a big a deal. For someone with ambitious goals in property, that 5k is less likely to matter.

E.g. in Cbr have a lovely young family looking to purchase their first home. They dont want another home in the next 5-10 years and don't like investing their savings (would rather pay down debt). Perfect product for them - they save 5ish k which is great! In comparison have a young single guy looking to aggressively build after purchasing his first PPOR (taking advantage of the grant). Less relevant to him, he'd rather keep his capital, go I/O for cash flow and borrow at higher LVR.

Cheers,
Redom

 

[Mick C]

Thanks Redom and Tobe
Given the mostly negative feedback regarding ING from previous posts and the fact this is only for OO which is mostly going to benefit FHB on smaller loans would you really be inclined to recommend this to clients based on a saving of say 5k?

If that is capitalised over a 30 year loan then the amount is going to be almost insignificant (Roughly $5 a week)?

Nobody stays with one bank for the full 30 years....it's rare to see the new loans stay for more than 5-6 year let alone the 1 decade mark...esp First home buyers...

- Refinance after 3-5 years for a better rate or equity or better deal overall
- Refinance as your situation might have changed or goals might have changed- ie want to invest in property or shares now...
- Other reasons.

Average FHO for me is around $550,000- $700,000; so a 90% loan on a $550,000 purchase would save close to $10,500...property goes up by 10% over 3 years ( hopefully) refinance out to a cheaper 80% loan ( Presuming you dont need equity etc..) - do the numbers.

 

[albanga]

So I guess my next question then is what makes ING a non attractive fit for investors? I know a few people mentioned issues with releasing equity but what exactly are those issues?

 

[z611143]

FHB i am. What you reckon. Id have over 10% so <90% loan at good rate?

 

[Jamie M]

FHB i am. What you reckon. Id have over 10% so <90% loan at good rate?

The rates not bad - it's saving thousands on LMI that's the real kicker.

Cheers

Jamie

 

[Jamie M]

So I guess my next question then is what makes ING a non attractive fit for investors? I know a few people mentioned issues with releasing equity but what exactly are those issues?

Poor serviceability calc is one of the main issues.

Can be difficult to access equity with also - although I did a recent top up at 90% without too many hassles. Just took a bloody long time.

Cheers

Jamie

 

[z611143]

The rates not bad - it's saving thousands on LMI that's the real kicker.

Cheers

Jamie

If im looking to use equity to build later on is this not a good loan to go with?

 

[Peter_Tersteeg]

So I guess my next question then is what makes ING a non attractive fit for investors? I know a few people mentioned issues with releasing equity but what exactly are those issues?

Serviceability policies, cash out policies, full assessment policies; all contribute to making ING a non ideal lender for investors. I'm happy to walk you through their calculators and policies, compare them with other lenders and it's very clear why the brokers are saying they're not an investment lender.

FHB i am. What you reckon. Id have over 10% so <90% loan at good rate?

The 90% LMI discount is worth at least a 0.2% rate discount every year for 5 years. If ING is a suitable lender to your longer term needs, odds are this is a cost effective deal.

If im looking to use equity to build later on is this not a good loan to go with?

ING is definitely not a lender I'd recommend for construction. I don't think the LMI waiver would apply to a later construction anyway.
Edit: I probably misunderstood the question. The answer for building equity later really depends on your circumstances. There's no answer that fits everyone.

 

[bigdealbaby]

Very interesting, does anyone have a link to the offer?

I have a friend who might be very interested in this.

Cheers.

 

[Jamie M]

Very interesting, does anyone have a link to the offer?

I have a friend who might be very interested in this.

Cheers.

I don't know if it's advertised on their site yet but Pete's pretty much pasted the broadcast email that was sent to brokers outlining the parameters of the offer.

Cheers

Jamie

 

[albanga]

Thanks for the offer Peter!
Be careful what you wish for though, you could lose your ear if I get started. You might start with ING but there are a lot of lenders

 

[Jess Peletier]

If im looking to use equity to build later on is this not a good loan to go with?

This deal is only for owner occupied which might not suit you in the first place, and added to that, as others have said the cash out policy is no good for investors. So prob not the best for you unless you're happy to live in it for a bit and potentially refi down the track if need be.

 

[Azazel]

So if I'm looking at a house with the aim to live in it in 2-3 years, but want to rent it out in the meantime would I be able to use this type of loan?
Can I pay interest and principal AND rent it out? Can you still claim interest costs during the 2-3 years like an IP?
Would be grateful for any suggestions.

 

[tobe]

no, yes, and yes.

 

[Jamie M]

Hiya

The intention of the promo is for owner occ - and you're intending to purchase an IP (albeit initially as an IP) so based on their criteria, it wouldn't apply to you.

Whether they'd be able to tell if the property is rented out or lived in as an owner occ after settlement is unknown.

You can have a P&I loan for an IP - that's fine. You'll only be able to deduct the interest though.

Cheers

Jamie

 

[Peter_Tersteeg]

Quick clarification for the brokers if you're writing this product...

The max LVR is 90% inclusive of LMI. LMI is $1 (they're not basing it on the normal LMI). Calculate 90% of the property value and subtract $1 and you should be okay.

 

[tobe]

Hiya


Whether they'd be able to tell if the property is rented out or lived in as an owner occ after settlement is unknown.

Jamie

Most mortgage documents ask you to let the lender know of any change to your circumstances, so the onus is on the client to tell the lender they are renting out the property. I doubt that would trigger ING to bill the client for the LMI, but who knows.

 

[Azazel]

Thanks tobe and Jamie M for the quick replies!

 

[UrbanPlanner]

What sort of interest rate is attached to this product? Would it suit someone using equity/savings to upgrade PPOR at around $1m purchase price? Will likely stay there for 5+ years, so by the sounds of it might have the option of refi after that to another product.

Have 3 other IP's (incl current PPOR) with other lenders that we can use to pull equity from to keep going..

So for $1m pp, we'd need at least $100,001 in equity/savings..