|Mortgage broker||Vivienne Than|
|Purpose||To purchase an owner-occupied property with the lowest possible deposit and no LMI.|
|Security||$400,000 – NSW|
|LVR and Term||95% LVR (loan to value ratio) with no LMI, 30-years loan term|
|Problem(s)||Only 5% deposit was available with no genuine savings or guarantors.|
|Solution||To get approval for the First Home Loan Deposit Scheme (FHLDS) by checking the client’s eligibility.|
Abhay Patel, a road designer based in NSW, was looking to purchase his first home. Vivienne Than, one of our specialist mortgage brokers made the first contact and learned that the client wished to get a 95% LVR home loan.
Abhay wished to purchase a property with the lowest possible deposit without any LMI.
Abhay’s requirements were:
- To get a competitive interest rate.
- To be able to make extra repayments with a redraw facility.
- To get pre-approval from a lender.
The issue with low deposit
After discussing the scenario and potential credit issues, our broker identified that the client just had a 5% deposit. The deposit was arranged through gifts from his parents.
Most lenders in our panel don’t consider it as genuine savings and to top that off, the client had no guarantors.
Since lenders identify all loans over 80% as high risk, lenders’ mortgage insurance (LMI) usually is applicable.
However, that was not what Abhay was opting for.
FHLDS to the rescue
Vivienne was quick enough to notice the client’s clean credit history and a stable income. After checking the client’s eligibility under the first home loan deposit scheme, she helped him apply for it.
Applying for the first home loan deposit scheme
This scheme allows first home buyers to borrow with as low as 5% deposit without paying LMI. The government acts as an insurer for eligible first home buyers, which allows borrowers to save on LMI fees.
A quick look at Abhay’s credit history was enough for our broker to recommend a few home loan products that met his requirements.
Moreover, he achieved an incredible 859 score from Equifax, which meant reduced risk for lenders.
Vivienne applied for the loan with one of our lenders that accepted 6 months rental ledger as proof of genuine savings.
Thus, the client was able to get pre-approval from the lender by using gifts from parents as a deposit.
A happy ending
Finally, Abhay got everything he was hoping for:
- Got a good rate on his new loan at 2.81% p.a.
- Loan term of 30 years.
- Low deposit home loan under FHLDS.
- Loan product equipped with extra repayments and redraw facility.
Need a loan with a low deposit and no genuine savings?
Our specialist mortgage brokers can help you find the perfect solution when it comes to 95% LVR home loans.
With over 50 lenders on our lending panel, we can usually recommend the right loan products for you.
Call us on 1300 889 743 to speak with one of our specialist mortgage brokers or fill in our free assessment form for expert advice.