Discussion in 'Property Finance' started by tgg, 16th Jun, 2015.
Are there any lenders left that will do 95% + LMI (total with capped LMI, say 97%) loans out there?
Is it for PPOR or IP?
Some reason you don't have a proper deposit?
Yeah few lenders - a couple of good ones that come to mind is CBA, Westpac and RAMS (RAMS do 98.5%) but they all have certain guidelines.
Is it for an owner occupied or investment and if investment is it your first property?
It's an investment.
It's third investment property
CBA won't do 95%+ cap LMI for an IP - Max 95% incl LMI
Ok then that rules out a few lenders but there are still a few will do 97% including LMI but again there are guidelines and its certainly not that easy to get across the line.
For example westpac will do 97% but you need to have 10% equity against another property.
ANZ did one today for me @ 95% (incl LMI).
With ANZ you'd have to be an existing customer (6 months +, CC will do) to get 95er loans.
Westpac group are a good bet, but will be credit scored v.harshly so the other parameters will need to stack up.
The restrictions on 95% investment lends are so tight and the extra costs of the LMI are so high, you're far better off to save a little extra to qualify for a 90% lend.
In many cases, we're talking about 1% - 2% of the purchase price.
If servicing permits and you've got 10% equity then WBC is generally a good option at this LVR.....but the deal will be scrutinised hard. They'll even order desktop vals on your existing portfolio to confirm you hold enough equity.
Westpac's credit scoring is quite good unlike say NAB @ 95%. The issue with Westpac is that if the deal is outside the assessor's delegation and it goes to credit AKA the graveyard then it will encounter issues.
Slight sidestep off topic. But is 88% still a favourable LVR to get to with all the new hurdles for reducing LMI? Obviously 80% is best to avoid paying LMI altogether, but some Lenders making the new norm 90%, 88% is not too much further to stretch. . .
The 88% comes from the fact that quite a few lenders put you into a different price and assessment category if you capitalise LMI above 90%.
For example, with the CBA you can borrow 90% and capitalise the LMI above that (to roughly 92.3%) with no adverse affects.
With the NAB and many others, you can borrow 90%, but if you add the LMI above this you get higher rates and nastier credit scoring. You probably wouldn't bother. As a result, it tends to work well with these lenders if you borrow 88% + LMI. The total LVR tends to be just below 90%.
There is a bit of a savings benefit to 88% base LVR as well.
I see. I'm trying to punch one through with NAB at the moment. Managed to get the Application in on the Wednesday before the Friday deadline for changes. Capitalised LMI puts it at 91.3% or thereabouts, thus attracting a "penalty" IR of 4.79% to go above 90%. Might be worth my while long term to put in a little extra to keep it at, or just under 90%.
I've heard that Liberty Financial offer 95% + capped LMI for investors. Has anybody had any experiences with them?
That is correct, if you have 10% equity in another property. If the LVR is your only concern, you'll get a better deal with Westpac.
With Liberty you dont need the extra 10% equity...as they have a inhouse Risk fee product ( ie in house LMI)
So 95% + Risk fee ( LMI)
- Cat 1 and 2 location
- Full time perm for Over 2 years in same company or 2 years full tax return for self employed with Min 3 years ABN
- Max property is $550,000 ( Yes that kills a lot of my Sydney investors)
- 5% + Stamp duty genuine savings
Mick my information for the 10% equity component was straight from my BDM yesterday.
It's possible it was for their non-genuine savings product.
Liberty has 4-5 product line i think and each one with it's own policy..so it's confusing...even My BDM gets confused btw the product and policy sometimes lol
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