That sounds promising. Was the loan interest only or P&I? I am hoping to get IO as PPOR may become IP in future years. Is IO possible for 95% + LMI?
95% + Lmi??
- Thread starter Ann101
- Start date
That sounds promising. Was the loan interest only or P&I? I am hoping to get IO as PPOR may become IP in future years. Is IO possible for 95% + LMI?
Hello Ann
Welcome to the Forum
You haven't really said much about your preparation for this loan
Suncorp require 5% Genuine Savings or not less than 3% for First Home Buyers
This must be evidenced over the previous 3 months, however they can and do make their own decisions – recently with one of my applications Suncorp have required to see 5% Genuine Savings over the previous 6 months to satisfy themselves that the applicant can manage their money and that the savings are from income
Suncorp do not offer Interest Only for loans >90%LVR
BankWest require 5% Genuine Savings evidenced over the previous 3 months. BankWest allow Interest Only for loans >90%LVR
Neither of these lenders will accept the FHOG as Genuine Savings although will accept it as part of a buyer's contribution towards the purchase
As you seem to 'need' the full 95% loan - hence the capitalisation of the mortgage insurance - this would indicate that you have saved 5% and only the 5% and that FHOG and Stamp Duty Concessions are what will be getting you in the door. Is this right?
So this begs the question: If NAB have indicated that, on the face of it, you can service a $1,000,000 loan, that would mean that as a single person with no dependants you earn around the $150,000 gross annual income - more, if you have any dependants, credit cards or other financial commitments.
If so, with the absolute minimum of savings to contribute, a lender would be thinking 'What the hell does she do with it!!!'
If you have recently complete a significant financial commitment, or are paying high rent, this may go some way towards explaining the small amount of savings relevant to income, but when preparing to make an application for a loan it is not enough to read the brochures on line and think that you meet the published criteria
The lenders must not only accept your application but also obtain the mortgage insurance, otherwise they cannot proceed with an approval
You have to prepare yourself so that your broker can ‘sell the deal’ firstly to the lender who will then on sell the deal to the insurer
So everything has to be in order. Steady employment history, stable residential history, regular savings over a period of time, no high level of consumer debt – and it doesn’t matter whether you ‘always pay your credit card on time’ – income not reliant on shift work or overtime and a number of other factors
The level of borrowings isn’t the problem, and the LVR isn’t the problem, the problem will be with the overall preparation and presentation of the application.
If all is in order, then you would most likely be successful with your application
Regarding pre-approvals, Suncorp will do a fairly thorough preliminary assessment but BankWest will not devote staff time to pre-approvals and will do just a basic credit check
And on that note, you haven’t mentioned whether you are buying a house or an apartment. If an apartment, Suncorp will not take a car park into account and will remove the value of the car park from the LVR assessment
You really need to speak with a broker who is experienced with both these lenders to get a good idea of what will be required from you in support of your application
Good luck! There is nothing quite like having your own home
Cheers
Kristine
Welcome to the Forum
You haven't really said much about your preparation for this loan
Suncorp require 5% Genuine Savings or not less than 3% for First Home Buyers
This must be evidenced over the previous 3 months, however they can and do make their own decisions – recently with one of my applications Suncorp have required to see 5% Genuine Savings over the previous 6 months to satisfy themselves that the applicant can manage their money and that the savings are from income
Suncorp do not offer Interest Only for loans >90%LVR
BankWest require 5% Genuine Savings evidenced over the previous 3 months. BankWest allow Interest Only for loans >90%LVR
Neither of these lenders will accept the FHOG as Genuine Savings although will accept it as part of a buyer's contribution towards the purchase
As you seem to 'need' the full 95% loan - hence the capitalisation of the mortgage insurance - this would indicate that you have saved 5% and only the 5% and that FHOG and Stamp Duty Concessions are what will be getting you in the door. Is this right?
So this begs the question: If NAB have indicated that, on the face of it, you can service a $1,000,000 loan, that would mean that as a single person with no dependants you earn around the $150,000 gross annual income - more, if you have any dependants, credit cards or other financial commitments.
If so, with the absolute minimum of savings to contribute, a lender would be thinking 'What the hell does she do with it!!!'
If you have recently complete a significant financial commitment, or are paying high rent, this may go some way towards explaining the small amount of savings relevant to income, but when preparing to make an application for a loan it is not enough to read the brochures on line and think that you meet the published criteria
The lenders must not only accept your application but also obtain the mortgage insurance, otherwise they cannot proceed with an approval
You have to prepare yourself so that your broker can ‘sell the deal’ firstly to the lender who will then on sell the deal to the insurer
So everything has to be in order. Steady employment history, stable residential history, regular savings over a period of time, no high level of consumer debt – and it doesn’t matter whether you ‘always pay your credit card on time’ – income not reliant on shift work or overtime and a number of other factors
The level of borrowings isn’t the problem, and the LVR isn’t the problem, the problem will be with the overall preparation and presentation of the application.
If all is in order, then you would most likely be successful with your application
Regarding pre-approvals, Suncorp will do a fairly thorough preliminary assessment but BankWest will not devote staff time to pre-approvals and will do just a basic credit check
And on that note, you haven’t mentioned whether you are buying a house or an apartment. If an apartment, Suncorp will not take a car park into account and will remove the value of the car park from the LVR assessment
You really need to speak with a broker who is experienced with both these lenders to get a good idea of what will be required from you in support of your application
Good luck! There is nothing quite like having your own home
Cheers
Kristine
As an aside...would this effectively push your LVR up, making it harder to get the loan? How do they value the car park?
Thanks
Josh
Hi Kristine. Oops! I am still getting used to what information is relevant to post, so sorry I missed details of my loan preparation but here they are. I can show genuine savings >5% for well beyond 6 months and I'm not a FHB. I also have other investments which would show a lender where my money has gone. All the other factors you mention are in order. i.e steady employment history, stable residential history, regular savings over a period of time, no high level of consumer debt etc. I am looking to buy a house.
I have contacted a MB late yesterday and hope to get some feedback today. Thanks for the great feedback. Ann
Hello Josh and apologies to Ann for the sidetrack
I recently lodged a Suncorp application for a Melbourne bayside purchase for $532,000, being a flat with a car park on an accessory title
Suncorp valuation came back at $520,000 for the residential space and $12,000 for the car park space, so Suncorp would lend only against the residential space value of $520,000
BankWest accepted that the flat plus car space was one property as the car space could not be sold separately, and BankWest valuation came back at $532,000 which value they would lend against
A few years ago I wrote a Suncorp loan for a similar flat plus car space two streets away from this recent property and in those days Suncorp would lend to 100%LVR which they did for that property, without separating out the values of the two titles
However, back then Suncorp insured with PMI which have since been taken over by QBE - but BankWest also insure with QBE, so this is just one example of how each lender does have different lending policies, not just for matters involving income but also for how they assess the security
These variances in lending policy is just one factor influencing the growth of the mortgage broking industry in Australia. It is simply not possible for a borrower to be aware of all these subtle differences whereas a broker working in the industry full time will be juggling these issues every day
Hope this helps
Kristine
Hi,
In the case of the deal that I did with Suncorp at 95% plus LMI yes the deal was very very strong.
