95% lend mortgage insurance

[tobe]

there are a couple of lenders who can do 95% and dont credit score. they also have arrangements with their mortgage insurers not to credit score either. they have other rules and policies to dodge, but not credit scoring per se....

The main issue with your application is the vendor agreement to pay stamp duty. This will kill the deal every day of the week.

 

[tambourineman]

there are a couple of lenders who can do 95% and dont credit score. they also have arrangements with their mortgage insurers not to credit score either. they have other rules and policies to dodge, but not credit scoring per se....

The main issue with your application is the vendor agreement to pay stamp duty. This will kill the deal every day of the week.

Thanks tobe, why is the latter such a big deal?

 

[Rolf Latham]

Thanks tobe, why is the latter such a big deal?

I will let TB answer in detail with the mechanics


The "real world" LVR will be near or > 100 % ( if LMI capped) ...........and I would not want to beholding that puppy if it ever went into arrears

ta
rolf

 

[tambourineman]

I will let TB answer in detail with the mechanics


The "real world" LVR will be near or > 100 % ( if LMI capped) ...........and I would not want to beholding that puppy if it ever went into arrears

ta
rolf

these loans were pretty common before the GFC, and before anybody chimes in with 'that is what caused the problem in the first case' it isnt, it was because in the US they made these loans to people without a job or assets and could obviously not service them.

it is what it is, either they accept it or they dont - we can afford to service the loan without a problem and I have worked for the same company for several years. We just dont want to wait several more months to accumulate the stamp duty, for a variety of reasons and dont want to build off the plan (which would require us to pay no stamp duty in NSW).

 

[Rolf Latham]

it is what it is

agreed

ta
rolf

 

[Aaron_C]

TB as a general rule when it comes to mortgage insurance they want the deal to be as simple as possible. You earn $X, you are paying $Y for a property (purchases always preferred without a doubt). Once you start introducing things like vendor finance or cash-out they don't like it one bit.

 

[Marty McDonald]

I dont want to be a pessimist but I wouldn't have even submitted this loan and it should be declined by the lender (sorry).

The vendor giving you the stamps essentially means the value of the property is the contract price less the stamps amount so the LVR will be over 95% no matter how you cut it. If the bank or QBE doesn't pick this up I would be exteremy surprised.

There is also a potential issue if they approve the loan and after approval their lawyers pick up from the special conditions the stamps issue. They usually ask for a copy of the full contract before settlement. If that happens the bank can withdraw their offer and you may have a really really big problem.

Be careful..

 

[tambourineman]

I dont want to be a pessimist but I wouldn't have even submitted this loan and it should be declined by the lender (sorry).

The vendor giving you the stamps essentially means the value of the property is the contract price less the stamps amount so the LVR will be over 95% no matter how you cut it. If the bank or QBE doesn't pick this up I would be exteremy surprised.

There is also a potential issue if they approve the loan and after approval their lawyers pick up from the special conditions the stamps issue. They usually ask for a copy of the full contract before settlement. If that happens the bank can withdraw their offer and you may have a really really big problem.

Be careful..

Although I am aware that the bank loans against the purchase price or the valuation (whichever is the lesser) I have a valuation on the property at 415 and we are paying 390 and they are paying the stamp duty - its not like we are offering them more than the listed price - there is nothing sinister about it.

The Bank is aware of how the stamp duty is being paid.

 

[Rolf Latham]

The Bank is aware of how the stamp duty is being paid.

Full disclosure is a good thing

ta
rolf

 

[tobe]

by having the vendor agree to pay stamp duty, you are effectively getting a rebate, or a discount from the price. This is fine, people have the right to sell fro whatever terms they choose, however the bank would like to find out the actual consideration amount agreed. They would then base their lending on that lower amount.

Im surprised your estate agent or broker/banker hasnt picked up on this.

 

[Marty McDonald]

No probs then I take it back.

 

[tobe]

Please let us know how it goes.

As previously discussed, I find it dificult to believe the banker or broker would take the deal on with the vendor paying stamp duty.


They are either not disclosing it to the assessor and hoping it wont get picked up further down the track, or they are too green to realise its a deal killer.

 

[tambourineman]

Please let us know how it goes.

As previously discussed, I find it dificult to believe the banker or broker would take the deal on with the vendor paying stamp duty.


They are either not disclosing it to the assessor and hoping it wont get picked up further down the track, or they are too green to realise its a deal killer.

- The Agent suggested it.
- The Bank is aware of it and I have provided copies of correspondence from the Agent confirming it is a condition of the sale.

The stamp duty may not need to be paid, the house is still under construction, I understand a rebate applies in NSW but was of the impression it only applies at a reduced amount if the house has already commenced.

I have read the QBE LMI guide (I musnt have anything else to do) - it just says Genuine Savings cant be derived from vendor incentives - nothing about stamp duty - the method of funding just needs to be acceptable to them.

 

[tobe]

If you read a bit further down on the QBE guide, point 10, Equity,

Unacceptable Equity
The following are not acceptable:
 Borrowed equity,
 Advance on wages/commission,
 Barter Card or other swap negotiations,
 Builder discount/finance or any form of incentive,
 Proceeds from Gaming,
 Rental discounts,
 Vendor discount/finance or any form of incentive,
 Gifted Equity,
 Lender finance of Equity Requirements, and
 Advantageous Purchase.

 

[Marty McDonald]

I'm with you Tobe not their cuppa me thinks.

 

[tambourineman]

If you read a bit further down on the QBE guide, point 10, Equity,

Unacceptable Equity
The following are not acceptable:
 Borrowed equity,
 Advance on wages/commission,
 Barter Card or other swap negotiations,
 Builder discount/finance or any form of incentive,
 Proceeds from Gaming,
 Rental discounts,
 Vendor discount/finance or any form of incentive,
 Gifted Equity,
 Lender finance of Equity Requirements, and
 Advantageous Purchase.

this is incorrect, it helps to read the fine print:

under Section 2 ' Genuine Savings and Equity':

Borrowed equity is acceptable provided it is fully disclosed and the borrowers provide at least 5% of the purchase price from Genuine Savings. All repayments are to be included in calculating the borrower‟s capacity to repay.

and

The source of where funds to complete the transaction are coming from must be disclosed and acceptable to QBE LMI

The Valuation is complete and I understand it is going to QBE on Monday - so it could be a show stopper but I will let you know how we get on. Nothing ventured nothing gained.

 

[Rolf Latham]

this is incorrect, it helps to read the fine print:

under Section 2 ' Genuine Savings and Equity':

Borrowed equity is acceptable provided it is fully disclosed and the borrowers provide at least 5% of the purchase price from Genuine Savings. All repayments are to be included in calculating the borrower‟s capacity to repay.


Fingers crossed

Borrowed equity isnt the case here.

You could make some argument for the case of a favourable sale..........usually amongst relos only.

One thing you really want to be careful of is unconditional where the lender hasnt specifically seen the rebate come up.

We have often got to 4 days out from settlement, and the soli acting on behalf of the lender want ths full contract and the special conditions attached, and can sink the deal, and not being able to complete.

We have had this happen with early settlement rebates for land as an example. I know stamp duty payment conditions often slip through and do settle, but you need to assess your downside risk if you are in breach and cant complete.

I feel most if us here arent trying to give you a lecture on what you can and cant do, rather some warning flags along the way.


ta
rolf

 

[tambourineman]

this is incorrect, it helps to read the fine print:

under Section 2 ' Genuine Savings and Equity':

Borrowed equity is acceptable provided it is fully disclosed and the borrowers provide at least 5% of the purchase price from Genuine Savings. All repayments are to be included in calculating the borrower‟s capacity to repay.


Fingers crossed

Borrowed equity isnt the case here.

You could make some argument for the case of a favourable sale..........usually amongst relos only.

One thing you really want to be careful of is unconditional where the lender hasnt specifically seen the rebate come up.

We have often got to 4 days out from settlement, and the soli acting on behalf of the lender want ths full contract and the special conditions attached, and can sink the deal, and not being able to complete.

We have had this happen with early settlement rebates for land as an example. I know stamp duty payment conditions often slip through and do settle, but you need to assess your downside risk if you are in breach and cant complete.

I feel most if us here arent trying to give you a lecture on what you can and cant do, rather some warning flags along the way.


ta
rolf

Thankyou, and I do appreciate the advice.

 

[tambourineman]

Hi

The Bank tells me today it is with their "sanctioning" department - can anybody tell me what this means - it seems to be taking a painfully long time although it would be worse if they said no by now.

 

[Rolf Latham]

Hi

The Bank tells me today it is with their "sanctioning" department - can anybody tell me what this means - it seems to be taking a painfully long time although it would be worse if they said no by now.

That means its now with credit.......

then it still needs to go to QBE

ta

rolf