Are there banks that offer 95% plus LMI home loans?

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Arya
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Joined: Fri Mar 29, 2019 1:10 pm

Are there banks that offer 95% plus LMI home loans?

Postby Arya » Fri Mar 29, 2019 1:12 pm

Hi, I’ve saved up around $30,000 and will need a home loan amount of $470,000. I know the LVR is quite high, that’s why I’m asking, are there banks that offer 95% plus LMI home loans? If there are, how do I qualify?

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Otto Dargan
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Re: Are there banks that offer 95% plus LMI home loans?

Postby Otto Dargan » Fri Mar 29, 2019 2:01 pm

Hello Arya. Welcome to the forums.

Yes, there are specialist lenders that offer 95% plus LMI home loans. However, major lenders, in particular, do not approve low deposit home loan applications.

In order to qualify with the minimum 5% deposit, you’ll need:

  • A good income: Lenders tend to be quite strict when assessing your ability to pay back a 5% deposit home loan.
  • Stable employment history: Although there are exceptions, this usually means that you’ve been working in the same job for the past 6 to12 months.
  • A clear credit history: Your credit file must have minimal credit enquires and be free of defaults.
  • Strong asset position: Lenders will assess your income to asset position relative to your age.
  • Little to no existing debt: Having more than one credit card and/or personal loan is a red flag.
  • Proof of 5% in genuine savings: This is usually in the form of regular deposits into a savings account over a period of 3 months.

Speak to one of our experienced mortgage brokers by calling us on 1300 889 743 or fill in our free assessment form to find out if you qualify for a 95% plus LMI mortgage.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Arya
Posts: 3
Joined: Fri Mar 29, 2019 1:10 pm

Re: Are there banks that offer 95% plus LMI home loans?

Postby Arya » Fri Mar 29, 2019 4:48 pm

We have enough to cover 5% that we saved up over the course of six months if you don’t call it genuine savings, I don’t know what you’d call it. How do lenders define genuine savings?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
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Re: Are there banks that offer 95% plus LMI home loans?

Postby Otto Dargan » Fri Mar 29, 2019 5:03 pm

Hi Arya,

You’re absolutely right. Genuine savings is essentially money you’ve saved up yourself. The following are considered genuine savings if they add up to be more than 5% of the purchase price:

  • Savings held or accumulated over 3 months.
  • Term deposits held for 3 months.
  • Shares or managed funds held for 3 months.
  • Equity in real estate (varies depending on the lender).
  • If you’ve been renting for the last 3 months then you can use paid rent as genuine savings.
To be clear you’d still need the deposit, however, it can come from other sources such as a gifted deposit.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Arya
Posts: 3
Joined: Fri Mar 29, 2019 1:10 pm

Re: Are there banks that offer 95% plus LMI home loans?

Postby Arya » Fri Mar 29, 2019 6:12 pm

Oh yeah, got it. What I’m concerned about is if I’ll have enough cash to cover the extra costs involved. Give me a breakdown and total figure of additional costs involved when completing the purchase?

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Otto Dargan
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Posts: 7651
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Location: Sydney, Australia
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Re: Are there banks that offer 95% plus LMI home loans?

Postby Otto Dargan » Fri Mar 29, 2019 6:51 pm

Hi Arya,

When you buy a property, you can expect to spend up to 5% of the contract price on fees, duties and charges. They are what’s known as ‘funds to complete’ that you’d need to provide on top of your deposit.

You can use our property cost calculator to get an estimate of the government fees that will apply. Please note that our calculator doesn’t take into account fees such as:
  • Conveyancing fees which can cost approximately $800 to $1,500.
  • Inspections and reports fees can cost up to $600 in total.
  • Loan fees of lenders can vary from $0 to $900.
  • Since you’re borrowing over 80%, Lenders Mortgage Insurance (LMI) will be applicable. Please use ourLMI calculator to get a quote. There are some lenders who accept LMI capitalisation i.e. adding the LMI premium on top our home loan.


Speak to one of our experienced mortgage brokers by calling us on 1300 889 743 or fill in our free assessment form to find out if you qualify for a 95% plus LMI mortgage.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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