Anyone know what the banks will do for a first home buyer in terms of max LVR, assuming serviceability is OK? Cheers.
First Home Owner max LVR?
- Thread starter VYBerlinaV8
- Start date
In WA/SA you can get the Government lenders to go up to 98% LVR.
Otherwise, you can get lenders where they go 95%+LMI+credit card to pay for stamp duty.
some banks will allow full capping of the mortgage insurance on top of a 95% lend.
Thanks guys greatly appreciated.
97 % + a 20 k visa card if the servicing is really good
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...and that's responsible lending?????
A FHO, scratching to get together enough money to buy their first house and they throw in a 20K visa card?????
OMG, talk about chucking petrol on a fire.
I see a lot of these people going to the wall when rates start to go up in the next year or so.
...and that's responsible lending?????
A FHO, scratching to get together enough money to buy their first house and they throw in a 20K visa card?????
OMG, talk about chucking petrol on a fire.
I see a lot of these people going to the wall when rates start to go up in the next year or so.
Maybe, but remember its not just the dollar value of the loan, or the ratio that is the deciding factor in people defaulting.
Whether the loan is 50% or 100%, if someone loses a job, or gets stuck in harvey normal, or buys a second car with finance, or has a baby, they are still going to have issues paying their mortgage.
Of course at 50% the lender is more likely to get their money back. thats the only diference.
Are you worried on behalf of lenders Hot Rod?
...and that's responsible lending?????
A FHO, scratching to get together enough money to buy their first house and they throw in a 20K visa card?????
OMG, talk about chucking petrol on a fire.
I see a lot of these people going to the wall when rates start to go up in the next year or so.
They gotta prove 5% genuine savings though
Nope.
Just thinking it's the next wave of ACA or TT shows waiting to happen.
Seeing the long line of FHOs in financial trouble with a $40K CC bill.
Oh, it will end up that way. The banks will bombard you with limit offers and people will take up the offer as it inflates their ego at the same time as their debt.
95% or 97% borrowings is not the issue. Couple that with a nice fat CC that people will love as it covers all those unforeseen costs and before they know it they have 105 to 110% borrowings, increasing. Whack in increasing rates and there's a train wreck waiting to happen.
Hmm, I think its pretty hard to make a call on what ACA or TT will do a story on.
Theres lots of evidence the last time rates were this low people qualified for higher borrowings and then got into trouble as rates increased. Didnt see any stories about that, yet that was probably the biggest factor in defaults over the last 5 years, and the cause of lending standards staying strict, and mortgage insurance premiums increasing astronomically.
Theres lots of evidence the last time rates were this low people qualified for higher borrowings and then got into trouble as rates increased. Didnt see any stories about that, yet that was probably the biggest factor in defaults over the last 5 years, and the cause of lending standards staying strict, and mortgage insurance premiums increasing astronomically.
And it can only be used for purchasing costs and not a free for all at HN buying home theatre systems.
Aaron just did me one of these loans... was a longer application process than most but it was all approved and settles Wednesday
And it can only be used for purchasing costs and not a free for all at HN buying home theatre systems.
Aaron just did me one of these loans... was a longer application process than most but it was all approved and settles Wednesday
Well, that sounds a bit better.
Never heard of such a product. Is their a honeymoon period for the rates? What stops the card being used at HN?
No honeymoon.. its a 30 year term credit card with a reducing limit. Ie as its paid off the credit limit reduces to the balance outstanding.
Funds can only be drawn down at settlement to pay for stamp duty and purchase costs - a card is never issued.
Nothing stops the card being used after settlement, at HR, or anywhere else you can use a credit card.
Its at the same rate as the LOC home loan rate, and can be used for costs when making a purchase (not the 5% genuine savings, which must be contributed).
Ive used it a lot for people not eligible for the FHOG, or people who arent able to raise the extra money to cover stamp duty etc.
As noted earlier, its much harder to qualify for this product, but its not unusual to have a credit card alongside a home loan, the only diference here is the lender makes it possible to draw the credit card at settlement to pay stamp duty, whereas most other lenders either activate the credit car prior to or after settlement.
Its not a intro rate, the credit card is always the same as the LOC rate. Ongoing fee is $150 pa.
My Barnes loan document specifically says that the visa retention can only be used for purchasing costs at settlement and is not accessible for anything else?
hmm, I have written a couple of these over the last 6 months or so, and havent seen specifically any such condition.
In a previous role, pre GFC, I used this product a lot, and the rules around 5% gen savings and contributing 5% were diferent, so perhaps this is diferent now too.
I guess you can update us in the coming months when and if you get the credit card in the mail.
In a previous role, pre GFC, I used this product a lot, and the rules around 5% gen savings and contributing 5% were diferent, so perhaps this is diferent now too.
I guess you can update us in the coming months when and if you get the credit card in the mail.
Perhaps its a different interest rate for costs at settlement vs issuing a credit card with 20k limit? eg home loan rate if drawn up front, 20% if used as a normal CC?
Dont have my loan doc here with me today but happy to scan and send if you want to see the current wording. Or Aaron may be able to provide details/comment as he setup the loan.
Dont have my loan doc here with me today but happy to scan and send if you want to see the current wording. Or Aaron may be able to provide details/comment as he setup the loan.
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