Self Employed - Looking for Finance 90% LVR

[joyoboyo]

Hello

A quick question to see if any brokers on the forum can advise on the best lenders who are lending 90% LVR for self employed - if any.

I have been self employed for over seven years. All financials in order to fulfill a full doc loan. Looking at a property over a million and will need LMI to complete the deal. Have $170k ready in cash

Are banks lending on 90% LVR and how long are they taking to turn around new applicaitons

Broker I have spoken with recommended CUA

Any feedback or opinion on this much appreciated

 

[Aaron_C]

CUA sounds like a weird choice for a loan of this size.

 

[joyoboyo]

probably trying to go after the best rate I am guessing

 

[tobe]

being self employed isnt an issue if you have tax returns. the issue is 90% at that sort of loan amount. A lot of lenders restrict LMI to $750,000 max with LMI, and the ones that do LMI above that amount would want the deals squeaky clean, you know, only approving people who dont need it etc.

Your looking at around 4% for LMI by the way, thats a fair whack IMHO.

 

[Peter_Tersteeg]

My main concern in this scenario is that lenders assess loans above 80% as a higher risk. In most cases this isn't a problem but for a loan over about $800k it can get to the point where it's seen as too risky for many lenders.

Credit unions generally tend to be more conservative. Depending on prior relationships, past history, the overall strength of the application, they may be willing to do it, but CUA wouldn't be my first choice.

I'd be asking a lot of questions about current relationships with lenders to try figure out the best recommendation. You should also get a rock solid pre-approval before purchasing.

 

[Rolf Latham]

95 % even is possible

BUT

the LMI premium will eat you out of house and home

If you were my client id be suggesting an 88% + capped LMI lend to reduce the credit score impact of the LVR, AND id be looking at a lender that can approve LMI in house.

There are some lenders where I would NOT take a SE person unles their financials were very simple

t
arolf

 

[Aaron_C]

Honestly I think it's nuts to go with a 2nd tier lender for a loan of that size and LVR. As Peter said you'd want to go with a lender that you are an existing customer of with their own DUA.

 

[joyoboyo]

Rolf

Just to clarify the 90% LVR includes the LMI payment

I am a little nervous now given some of your responses

Thanks for your feedback

 

[Mick C]

7 years self employed + full doc....95% + LMI is even possible...

As mentioned i will def be shopping for LMI cost + making sure your file fits the LMI criteria - very common for banks to say yes and for the LMI to say no too the exact same file.

1. Unless your file is strong, look for DUA lender -their rates and LMI cost would be the same as CUA or very close, if not cheaper...

2. Reduce the LVR to 88% as mentioned by rolf - better credit scoring _+ LMI cost is 30% less in most cases. --- 88% + LMI = 89.9% roughly...

3. If your income is strong enough,it's even possible too borrow the stamp duty and lower your LVR further.

Nothing wrong with CUA as such....just nothing that say this is def a "cua" deal...what was the reason behind the recommendation and cost of the lMI?

 

[Rolf Latham]

Rolf

Just to clarify the 90% LVR includes the LMI payment

I am a little nervous now given some of your responses

Thanks for your feedback

So your base deposit is around 13 % approx

dont be nervous per se.......... just line it up so you get the best shot, for the right reasons, and you will be approved im sure.

Although your loan is largeish, > 750 k to 1.5 mill at 90 max doesnt phase me as long as you let the broker choose the lender that will provide thebest chance of approval, and be concerned about rate as a second tier issue.

Also, make sure the loan product you are choosing AND the lender suit your future needs.

IE, you are paying a bunch of LMI, so moving lenders will hurt.

If you are to draw equity in the future, use a lender that makes this possible.

CUA arent on my panel, but the dealings I have had with clients trying to pull equity - even at 80, havent been ideal

ta
rolf

 

[joyoboyo]

Thanks Guys for your feedback.

With regards the LMI, would the lender perform a valuation before deciding on this aspect

 

[Colin Rice]

Thanks Guys for your feedback.

With regards the LMI, would the lender perform a valuation before deciding on this aspect

LMI is calculated upfront based on the estimated valuation and then can be exacted once the valuation is received.

Depends on the lender and whether they do valuations upfront (before application is submitted) or post application (after it is submitted). Broker can advise on this.

FYI DUA = Direct Underwriting Authority which means the lender can sign of on the deal in house with out sending the file to the LMI (lenders mortgage insurer) for approval.
__________________

 

[Aaron_C]

Thanks Guys for your feedback.

With regards the LMI, would the lender perform a valuation before deciding on this aspect

Yes they would but the valuation won't be the sticking point most of the time. You will encounter issues prior to the valuation being done.

 

[Marty McDonald]

No need to panic. 90% LVR should be ok if servicing is fine but agree with my colleagues not a credit union loan for mine. I'd be looking at lmi cost as a big differentiator as well.

So many properties in this range are auction too so make sure your pre approval is rock solid.