LMI Approval on BW 90% non genuine savings loan.

[Rebdot]

My partner is in the process of obtaining approval from Bank west, our broker suggested that we apply for the 90% lvr non genuine savings loan and use our FHOG of $26,500 as a deposit. We had $4000 of non genuine savings which we plan on using for stamp duty ect.

My partner has applied for $241,964 (268,849- 26,5000), he checked his credit file and it is clear of any defaults or late payments although he has had 2 enquiries listed in 6 months and 18 all up over 7 years. He earns $73,000 gross, he has other financial commitments of $500 a month.

We are confident that his application will be approved by the bank but I don't think that it will be approved by QBE. I know that Bank west claims to do these deals all the time, however I can't find any positive outcomes?

Oh, and we are building so we have had to pay all our deposits before we could apply. We stand to lose $1000 in non refundable deposits if the deal does not go ahead.

 

[Jake D]

How do you get $26,500 from FHOG? I thought it was $14,000, or less?
Also, if you are eligible for FHOG, aren't you eligible for stamp duty to be waived?

 

[tobe]

vic country purchase, the fhog numbers and stamp duty are correct.

bankwest can be quite fickle, and take a long time to make a decision. Id suggest going with another lender if the application hasnt been submitted yet.

Are you currently renting through an estate agent? there are a few lenders who dont need genuine savings if you are renting.

 

[Rebdot]

How do you get $26,500 from FHOG? I thought it was $14,000, or less?
Also, if you are eligible for FHOG, aren't you eligible for stamp duty to be waived?

Were building a new house in country Victoria so we receive the FHOG and a bonus for building in regional Victoria.

No, in Victoria you still pay stamp duty even if your a FHO.

 

[Aaron_C]

Why don't you think it will be approved by the mortgage insurer? If you were worried about this your broker should have given your loan to a lender with a delegated underwriting authority (DUA) where the bank has the power to make the LMI decision without referring it to QBE/Genworth.

 

[tobe]

also, bankwest wont even look at the deal until you have the building contract. Builders can take some time to get this ready, so it becomes a very stressful time with the short time frame between build contract and land finance expiry/settlement.

Use a lender who can do a real pre-approval.

 

[Rebdot]

vic country purchase, the fhog numbers and stamp duty are correct.

bankwest can be quite fickle, and take a long time to make a decision. Id suggest going with another lender if the application hasnt been submitted yet.

Are you currently renting through an estate agent? there are a few lenders who dont need genuine savings if you are renting.

We are renting privately, the application is due to be processed through pre approval this afternoon.

Which other lenders could be go to for 90% lvr with non genuine savings?

 

[Aaron_C]

Genuine savings is only an issue if the LVR is above 90%. Below that and it's not a problem.

 

[Rebdot]

Why don't you think it will be approved by the mortgage insurer? If you were worried about this your broker should have given your loan to a lender with a delegated underwriting authority (DUA) where the bank has the power to make the LMI decision without referring it to QBE/Genworth.

I don't have any real reasons for not thinking it won't go through, I have read stories online of others being declined in similar situations. I have asked our broker about this a few times but I get told "not to stress". I don't think the he should apply with BW if there is a high chance of his loan being declined by QBE.

I'm not sure if the broker likes to go through Bank west first or if she is just confident that it will be approved as I can't get much information regarding the applications chances out of her.

 

[Rebdot]

Genuine savings is only an issue if the LVR is above 90%. Below that and it's not a problem.

The loan is exactly 90%, so would that be an issue?

 

[tobe]

there are a couple of lenders who can use the sale of an asset as 'genuine savings'. they can then lend to 95%. There are a couple of smaller lenders who do 95% without genuine savings. The mortgage insurance is a little higher. Which builder are you using? Are you using the broker the builder recomended? Has your broker done much construction finance?

 

[Rebdot]

there are a couple of lenders who can use the sale of an asset as 'genuine savings'. they can then lend to 95%. There are a couple of smaller lenders who do 95% without genuine savings. The mortgage insurance is a little higher. Which builder are you using? Are you using the broker the builder recomended? Has your broker done much construction finance?

We are building through Metricon. They put us on to the broker that we are going through. I know she also does work for Simmons as she has mentioned it.

 

[Aaron_C]

Well as brokers we can never be 100% sure that an application will go through especially when LMI is involved. However if your broker thinks it will be fine, then she should know as she is the one who knows your situation better than us.

 

[Aaron_C]

The loan is exactly 90%, so would that be an issue?

No it won't be re genuine savings. But LMI looks at more than that.

 

[Rebdot]

Thank you so much for taking the time to reply.

This may sound like a silly question but are these kind of loans commonly approved by LMI companies? Or, more commonly declinded?

 

[Aaron_C]

I think for 90% loans LMI isn't that hard to get. It's when you start going above that to the 95% space where it gets extremely difficult. But without knowing your financial situation I can't say any more than that.

 

[Rebdot]

I think for 90% loans LMI isn't that hard to get. It's when you start going above that to the 95% space where it gets extremely difficult. But without knowing your financial situation I can't say any more than that.

Thank you, the internet have given me the impression that LMI is rarely approved. I'm feeling more confident now.

 

[tobe]

she definately wont be working for both metricon and simonds, or not with their knowledge.

How long is Metricon going to take to get your contract? I suggest it will be signed just before FHOG expires on the 30th June. Your valuation and approval wont happen till after. the val will be short, and you will have to stump up more cash because you cant get a new contract and get the old grant.

If I were you Id get a builder who can do a contract in a couple of weeks instead of months, and get the valuation and approval done together, rather than sit on a hope with bankwest until you have contracts, wait for another couple of weeks for them to say no.

 

[Rebdot]

she definately wont be working for both metricon and simonds, or not with their knowledge.

How long is Metricon going to take to get your contract? I suggest it will be signed just before FHOG expires on the 30th June. Your valuation and approval wont happen till after. the val will be short, and you will have to stump up more cash because you cant get a new contract and get the old grant.

If I were you Id get a builder who can do a contract in a couple of weeks instead of months, and get the valuation and approval done together, rather than sit on a hope with bankwest until you have contracts, wait for another couple of weeks for them to say no.

She mentioned at our appointment yesterday that she was going to have Metricon make up a dummy contract for the time being. Is this dodgy? Our land contract will be available for signing this week.

 

[Aaron_C]

She mentioned at our appointment yesterday that she was going to have Metricon make up a dummy contract for the time being. Is this dodgy? Our land contract will be available for signing this week.

Dummy contract? Why?