Had a quick look over QBE and Genworth policy and looks to me that they only go as high as 90% lend for investments. Is this true or did I misread the info? If it is true, who does 95% investment loans? Do any lenders do 97% capped investment purchases out of curiosity?
Investment LMI
- Thread starter miximitosis
- Start date
Yes there are a few. bankwest is one. Anz another (for existing customers), loan ave, etc
Plenty do 95/97%.
However you need to be careful because you are paying LMI which may seem like a penalty but it can be a useful tool provider you can re-use the LMI credit with that lender.
Servicing and policy could stop you from drawing upon the equity. So choose your lender wisely and don't just go with "whoever does the highest LVR loan".
However you need to be careful because you are paying LMI which may seem like a penalty but it can be a useful tool provider you can re-use the LMI credit with that lender.
Servicing and policy could stop you from drawing upon the equity. So choose your lender wisely and don't just go with "whoever does the highest LVR loan".
They both do.
Depends on your circumstances though.
I went 95 on my first couple, but have gone 88-90 on other properties since. I find that to be a much better place to be.
In most cases you're better off flying under the DUA radar. Your broker will need to help you navigate through this path.
Depends on your circumstances though.
I went 95 on my first couple, but have gone 88-90 on other properties since. I find that to be a much better place to be.
In most cases you're better off flying under the DUA radar. Your broker will need to help you navigate through this path.
DUA, as in in-house LMI assessment or QBE/Genworth assessment?
I'm currently employed full time and looking at trying to get 1-2 minimum deposits together before I switch over to self employed mid 2016 (to be a broker actually. haha). I assume I will probably screwed for servicing for 1-2 years once I go self employed?
I'm currently employed full time and looking at trying to get 1-2 minimum deposits together before I switch over to self employed mid 2016 (to be a broker actually. haha). I assume I will probably screwed for servicing for 1-2 years once I go self employed?
Yes servicing will likely be screwed for a while (min 2-3 years).
I use Westpac for 97% IP's a bit but you must have 10% equity in another property. Too scared to try Bankwest and just had Nab reject 95% investment with IO repayments, they were OK with P & I. Ohh and CBA as long as credit score will likely be OK.
I use Westpac for 97% IP's a bit but you must have 10% equity in another property. Too scared to try Bankwest and just had Nab reject 95% investment with IO repayments, they were OK with P & I. Ohh and CBA as long as credit score will likely be OK.
You'll need 2 years ABN before self employed income can be considered for servicing. Do well enough in the second year and you should be fine for servicing at the end of year 2. Some will take 1 years financials. Others have stricter rules that don't particularly suit 'start ups' with huge increases in income from one year to the next.
Yep - DT makes a good point - sticking to 88-90% is more likely to 'fly under the DUA' radar, makes things a bit easier and quicker to approval.
Cheers,
Redom
Marty, was the NAB rejection a PPOR? Just wondering, APRAs wording today said specifically that I/O for PPORs will be watched cautiously.
Cheers,
Redom
I'm assuming the NAB one was as servicing issue, considering they were willing to accept P&I but not IO?
I agree with you re; Bankwest, they are certainly scraping the bottle of the barrel of lenders that I have any interest writing loans with thanks to their servicing model and policy set.
Who knows with NAB - their credit scoring for any deals above 90% always makes me nervous. Homeside more so than direct.
Cheers
Jamie
Thanks for the replies guys.....
Who do you guys normally go for with high LVR investments acquired early in the acquisition phase? I can't imagine I would be refinancing for a good 3-4 years if my serviceability is going to be rubbish for the first couple of years self employed...
Who do you guys normally go for with high LVR investments acquired early in the acquisition phase? I can't imagine I would be refinancing for a good 3-4 years if my serviceability is going to be rubbish for the first couple of years self employed...
It allows you to get more for your deposit.
Great during accumulation phase where capital is generally at a premium.
E.g. with 100k at 90% lends, you could build a 1mill portfolio (assuming no closing costs of course). At 95%, its 2mill. That's double the value of assets working for you. If the markets moving (like it has recently), making up for the additional LMI cost can be easy!
Cheers,
Redom
Great during accumulation phase where capital is generally at a premium.
E.g. with 100k at 90% lends, you could build a 1mill portfolio (assuming no closing costs of course). At 95%, its 2mill. That's double the value of assets working for you. If the markets moving (like it has recently), making up for the additional LMI cost can be easy!
Cheers,
Redom
Really depends on the indiviual - there's not really a one size fits all.
Access to equity back up to 90% is usually an important factor when deciding - as is the way the lender calculates serviceability.
Cheers
Jamie
NAB direct have always been stoopid with IO
Right now they cant organise a 6 pack in a brewery
ta
rolf
The Nab(broker) deal was a family trust with corporate trustee to purchase an IP. Existing trust has lending with the bank so credit scoring not an issue and servicing (with all existing Nab debts at 7.40% P&I ) surplus $1500 / m.
I think it going to get very hard / impossible to get IO above 90%.
The banks will fall over themselves not to get slapped with higher capital requirements by APRA so IO restrictions and high LVR will be a non no regardless of whether PPR or IP IMO.
I think it going to get very hard / impossible to get IO above 90%.
The banks will fall over themselves not to get slapped with higher capital requirements by APRA so IO restrictions and high LVR will be a non no regardless of whether PPR or IP IMO.
Hmm thats surprising, especially with that surplus buffer - thanks for sharing Marty.
Cheers,
Redom
