A Quick Overview
|Customer Goal||Looking to get home loan approval to purchase an owner-occupied property|
|Problem||Eager to buy the house they found at the asking price, 95% no LMI home loan|
|Loan Amount||$1.558 million|
|Security||Owner-occupied property, Victoria, $1.64 million|
|LVR and Term||95% LVR, 30 years|
|Income||$270,000 p.a. after taxes|
|Solution||Our mortgage broker helped the customer negotiate the price for the house and saved her $10,000 upfront. Our broker also got them approved for a waived LMI loan which saved them further tens of thousands in LMI fees.|
A doctor’s first home
After finishing her medical degree at the University of Queensland Australia, Gabriela got married and moved to Victoria with her partner Marcus.
Gabriela was a medical practitioner, and her professional life and personal life kept her occupied. She had never thought of buying her own property because she had always lived in the house Marcus had bought before she met him.
In 2019, she decided that she wanted to have her own property. She started looking in the market but found it challenging to find the one suited to her needs. After looking for several months, she finally found a property to her liking.
She was eager to buy the property but needed to get her finances ready. That’s when she got in touch with Jenish Manandhar, one of our specialist mortgage brokers to help her with the home buying process.
During their conversation, she mentioned that her objectives were:
- To make a written offer to finalise a deal with the vendor as soon as possible
- To get pre-approved for a 95% no LMI (Lenders Mortgage Insurance) home loan
Two key problems: Valuation and waived LMI
The first problem was that the vendor’s asking price for the property was $1.65 million. She was so eager to buy the property that she was ready to pay the asking price.
Usually, the Australian property market is intensely competitive and negotiating a price for a house may not always be an option.
On top of that, a valuation report had not been ordered yet. And lenders use the valuation figure to decide on the loan amount. So not only would she potentially be paying above the market price, the bank may decline the loan if the valuation came in low.
The second problem was that she wanted a 95% no LMI home loan. Usually, when borrowing over 80% LVR (Loan to Value Ratio), you are required to pay LMI. On a property valued over a million dollars, LMI fees would amount to tens of thousands of dollars.
Only a few lenders offer waived LMI for select medical professionals, and even then there are strict eligibility criteria.
Solution from an expert
Although Gabriela was eager to buy the property immediately, Jenish understood that most properties sell at a discount off the asking price. So he felt confident that he could negotiate a discount on the price of the house.
Jenish helped Gabriela draft an initial offer of $1.63 million. After some negotiation, the vendor agreed to sell the property at $1.64 million, which saved Gabriela $10,000 even before the loan process started!
There was another issue to deal with. One of Gabriela’s objectives was to get a home loan with 5% deposit and pay no LMI. Jenish knew that only a few lenders could do this loan.
After thoroughly assessing Gabriela’s situation, Jenish realised that she had an existing credit card with one of the major lenders. From experience, Jenish knew that this lender would be more open to considering the deal as she was an existing customer.
He ran the scenario with the lender, and after sending a few documents back and forth, they were willing to do the loan.
Our broker then officially submitted her loan application and all the supporting documents to strengthen her case. They did a final assessment and approved the deal. Gabriela was able to secure a 95% no LMI home loan!
Her offer on the house was accepted and the settlement date has been fixed.
She is now awaiting settlement.
Do you want us to help you get the most suitable home loan deal for your first home?
Call us on 1300 889 743 or fill in our free assessment form and one of our specialist mortgage brokers will get back to you right away.