Does anyone know whether its possible to do 95%+ for loan refinances/top up? I want to take out as much as possible to pay for a new purchase with debt rather than using my cash.
Thanks
Thanks
95%+ Refinance
- Thread starter red liverbird
- Start date
Can you clarify.
You're making a new purchase and you want to have funds available from your existing property to help with the new purchase?
Then yes you can, but you wouldn't do it as a top up. You would want to have a seperate loan as the purposes would be different. Also ensure that the securities aren't x-coll.
Yes, thats what im looking to do Brady. Thanks for your help.
Hmm i was doing some digging on this over the weekend.
From my understanding, it depends on the insurance underwriter. QBE wont go past 90% base LVR for refinances (so neither will Westpac). Genworth will go to 95% (+cap LMI if its your own PPOR). Note sure they'd let you release it for that purpose though, their policy states it to be dollar for dollar refinances. So it depends on which insurer your lender uses/if they have the option of using both.
In the current environment, lenders will have less of an appetite for this type of deal too, which could make it hard to get over the line...unless its a strong application.
Ps love the name, i assume its a Liverpool FC reference.
From my understanding, it depends on the insurance underwriter. QBE wont go past 90% base LVR for refinances (so neither will Westpac). Genworth will go to 95% (+cap LMI if its your own PPOR). Note sure they'd let you release it for that purpose though, their policy states it to be dollar for dollar refinances. So it depends on which insurer your lender uses/if they have the option of using both.
In the current environment, lenders will have less of an appetite for this type of deal too, which could make it hard to get over the line...unless its a strong application.
Ps love the name, i assume its a Liverpool FC reference.
Make sure you understand the costs of LMI and how it's applied to the loan before proceeding.
In most investment cases, LMI cannot be added above 95%. Effectively you get roughly a 91.5% loan plus LMI, to a total of 95%.
You can often capitalize the LMI on top of a 90% loan, so you get a 90% loan plus LMI to a total of about 92%.
In other words, you get to borrow another 1.5% of the property value, but your LMI premium doubles. You borrow another $2 only to give $1 straight back in fees.
There's also a higher risk of an outright decline (which you can't recover from by settling for 90% at that point), valuations have a tendency to get more conservative, likely higher interest rates and there's no equity in the property in the event you need to sell.
Just make sure you're aware of the cost/benefit of all this. My personal experience is that people who work with 90% lending tend to get a lot further in the long term than 95% lending.
In most investment cases, LMI cannot be added above 95%. Effectively you get roughly a 91.5% loan plus LMI, to a total of 95%.
You can often capitalize the LMI on top of a 90% loan, so you get a 90% loan plus LMI to a total of about 92%.
In other words, you get to borrow another 1.5% of the property value, but your LMI premium doubles. You borrow another $2 only to give $1 straight back in fees.
There's also a higher risk of an outright decline (which you can't recover from by settling for 90% at that point), valuations have a tendency to get more conservative, likely higher interest rates and there's no equity in the property in the event you need to sell.
Just make sure you're aware of the cost/benefit of all this. My personal experience is that people who work with 90% lending tend to get a lot further in the long term than 95% lending.
If you have cash I'd say use the cash. What is truly yours is the equity in each property regardless of how many properties you have mortgaged to the neck. There is very little point in eating up your equity by paying a 5 figure LMI premium on one of potentially both properties. If the market slows down or takes a downturn you can easily be stripped away of all equity if you are leveraged as high as 90/95%.
But then again if the property you are looking at is an amazing deal and a really good buy (which will allow you instant equity) then it could make sense.
Hard to make a call without knowing more specific details about each property but just some food for thought to help with your decision.
If you are releasing the equity at the same time as the new purchase and the bank controls the funds it can be possible with a few lenders but 95% inc LMI would be the max.
Possible yes.
Sensible ? most times no, its already been alluded to that the net benefit is usually very small witha much increased chance of a credit score decline.
Those 2 issues dont add, they multiply
ta
rolf
Sensible ? most times no, its already been alluded to that the net benefit is usually very small witha much increased chance of a credit score decline.
Those 2 issues dont add, they multiply
ta
rolf
Top up is possible but not easy.
The application has to be very strong - and the reason for the cashout needs to be evident.
Cheers
Jamie
ANZ will do 95% +cap lmi to 97% for customers 6 months+ including Esanda and credit card holders as they are not restricted by external lmi providers due to lmi being in house.
Done it as "cash out" but needs to be a strong deal.
Done it as "cash out" but needs to be a strong deal.
