St. George No Deposit Loan

Hi,

Has anyone had any experience with the St. George no deposit loan. Sounds too good to be true. Obviously will be expensive mortgage insurance to pay. Any other catches?

Gail
 
Gail,

It actually is quite a good 100% loan. There is actually no Mortgage Insurance payable however St George charge a Loan Extension Fee of 2.5% of the loan amount. There is a $750 application fee and the interest rate is .3% higher than their normal standard variable or fixed rates.(no a great deal more when you think about it) Another great feature is that after 12months of having the loan, if you have built up 10% equity or more for $400 you can switch to their standard rates, I am currently performing this option with quite a large number of my clients at the moment. The loan is quite hard to get as you need a very strong income position, it is either 1.25:1 if you have 2.5% of genuine savings over a minimum of 3 months or 1.5:1 if you have no savings. (These are ratios that St George use to assess your servicability.)

Regards

Chris Vitale
 
Hiya

One other small thing is to be aware that the conditions for PPOR and IP are different AND they are quite fussy about what regional areas they will insure.

ta

rolf
 
Hi Smitty,
Primary purpose can be for Owner Occupied or Investment.

As Rolf said, The requirements for investors are different, Mininimum net worth $175K in Marketable assets, At least One applicant must have $50K income pa.

Regards Steven.
 
Requirements for owner occupiers are 2.5% genuine savings.

A serviceability factor of 1.25 applies (normal factor for LVR upto 80% is 1.10)

Minimum of 3yrs residential and employment stability.

Max LVR is 100% for both OO and IP (this includes capitalisation of fees such as LMI)
 
With a servicability of 1.5:1 an applicant can obtain approval without any genuine savings at all. However the applicant will need to be VERY strong on ALL other criterior.
 
"There is actually no Mortgage Insurance payable however St George charge a Loan Extension Fee of 2.5% of the loan amount"... isn't that Loan Extension Fee more tham Mortgage Insurance? It's a very hefty fee!
 
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