Last Updated: 31st May, 2021

The story

Samantha and her husband, Bill, dreamed of purchasing a new house so they could start a family together.

After spending weeks searching, they came across a beautiful property at Loganholme, Queensland that was priced at $395,000.

As they only had around 5% of the property value in genuine savings, they were looking for a lender who would be willing to approve a loan amount of 95% plus the cost of Lenders Mortgage Insurance (LMI).

As first time buyers, they were eligible for both stamp duty concessions as well as the first home owners grant.

The problem

Firstly, most Australian lenders consider loans over 80% of the purchase price (LVR) as high-risk.

This is due to property market valuations over the life of the loan that could see the lender lose money if they were forced to sell your home in the event of default.

For this reason, they ensure these loans with Lenders Mortgage Insurance (LMI).

Secondly, she had only been employed in her new job for around 9 months.

Most lenders require clients to be employed for a minimum of 6 to 12 months before even considering a home loan application.

The solution

Samantha came to us when a major bank refused to approve her home loan

Home Loan Experts Mortgage broker Amine Berrada explained how this type of loan process would not be straightforward because so few lenders acknowledge, let alone approve, 95% home loans.

He explained how important it was to have all the necessary mortgage documents in check when applying for this type of loan. Even a minor error could jeopardise the whole loan application.

Failing to get approval would mean that they would lose their deposit and spend another 6 to 12 months to save another deposit.

He was eventually able to get their home loan approved through a second-tier lender.

Amine was able to help her build a strong case to show that she was financially stable and was capable of making her repayments on time.

He was also able to get Samantha and Bill an excellent fixed interest rate of 4.20% p.a. as opposed to the standard 5.50% p.a. that usually appies to 95% home loans.

Great win!

As a highly-experienced mortgage broker, Amine understood the market very well and knew exactly what the lenders wanted to hear when assessing a 95% home loan application.

He was proactive from the very beginning and came up with clear and thorough explanations for all of the lender’s queries.

As Samantha was financially stable, Amine was also able to capitalise the LMI fee so the couple didn’t have to pay this fee upfront.

This meant that she was able to borrow the full home loan amount of $375,250 (95% of the property value) plus the $12,442 for mortgage insurance.

Happy Ending

Samantha and her husband were extremely happy to buy the home of their dreams.

They now spend most of their free time growing vegetables in their garden and are expecting their first child.

Do you need help getting approved for a low doc home loan?

Call us on 1300 889 743 or fill in our free assessment form today.