St George pre approval - Q on stamp duty

[azzae89]

Hey guys,

I was talking to a SG lender yesterday about pre approval on a 320K loan.. They have a promo running til 31st march which is 5% deposit for 6 months pre approval period.. I want to get on this in combination with their new 4.99% 2 year fixed rate..

Anyway, I have the 5% (16K) but my killer is stamp duty.. My mum said shed lend me the 10K (I'd have to say its a 'gift' to lender) but I don't want to have to pay her back whilst making mortgage repayments.. So the question is, could I ask the lender I want an extra 10K for 'renovations' or 'furniture' they tack that on the loan, put it in my bank and I give it back to mum after settlement?

If it was easy as just capitalizing the stamp duty onto my loan that'd be perfect, but as far as I know lenders will only capitalise LMI and not SD..

Looking for a good ol fashioned loop hole so I don't need to come up with another 10K up front

P.S. They said theyd lend me 380K based on affordability.. But I only want max 320K... If that helps?

 

[Rolf Latham]

Hey guys,

I was talking to a SG lender yesterday about pre approval on a 320K loan.. They have a promo running til 31st march which is 5% deposit for 6 months pre approval period.. I want to get on this in combination with their new 4.99% 2 year fixed rate..

Anyway, I have the 5% (16K) but my killer is stamp duty.. My mum said shed lend me the 10K (I'd have to say its a 'gift' to lender) but I don't want to have to pay her back whilst making mortgage repayments.. So the question is, could I ask the lender I want an extra 10K for 'renovations' or 'furniture' they tack that on the loan, put it in my bank and I give it back to mum after settlement?

If it was easy as just capitalizing the stamp duty onto my loan that'd be perfect, but as far as I know lenders will only capitalise LMI and not SD..

Looking for a good ol fashioned loop hole so I don't need to come up with another 10K up front

P.S. They said theyd lend me 380K based on affordability.. But I only want max 320K... If that helps?

no, the loan to value ratio will balloon

I think you will also need to tip in a little of the LMI, since I think they will only cap to 97 %

On a 320 k lend the LMI will be approx 10 000, so you will need to find another approx 3500.

If you are looking for a lender that will cap all of the LMI, BWA and some others will.
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Be aware that your 6 mth preapproval doesnt mean a whole lot 30 days out from when it provided if there are any circumstances.

Best to get your banker or broker to be a little more forthcoming with your inputs required

ta
rolf

 

[Peter_Tersteeg]

I think their 'promotion' is a little misleading. About the only thing they're doing is offering a pre-approval for 6 months whereas most lenders only offer them for 3 months. It's a bit hollow regardless because they reserve the right to reassess if they want to regardless.

5% is the contribution you make the property purchase. You also need to have the funds for the stamp duty and any LMI that exceeds 2% of the loan amount (which it usually will). You can't borrow any of this, although you can get a gift from family and the first home owners grant can also contribute (for what it's worth in NSW).

We often get asked the question can additional funds be borrowed to fix up the house once you move in. The answer is generally no, if this is your plan you need to set aside cash for that purpose.

 

[Aaron_C]

azzae - the question boils down to the loan to value ratio (LVR). Seems like you are going for a 95% loan + LMI. As others have said you will still have to work out the stamp duty and the extra LMI that goes beyond 97%. Perhaps consider another lender that will capitalise all the LMI and accept a gift from a family member for the stamp duty. Tread carefully. A good preapproval is not a bad idea for a 95% lend BUT it has to be assessed by credit to be worth anything.