Got knocked back by the mortgage insurer - 95 per cent home loan

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NigelB
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Joined: Mon Jul 15, 2019 7:16 pm

Got knocked back by the mortgage insurer - 95 per cent home loan

Postby NigelB » Mon Jul 15, 2019 7:18 pm

Hi, I’ve been investing most of my earnings into my business from which I earned well over $100,000 last year. So, I thought with property prices in my area where they are currently, it’s time for me to purchase another property. I approached my bank for a mortgage and the LO (loan officer) told me that even with a 5% deposit I wouldn’t be able to qualify for their mortgage. They told me its because of their mortgage insurer. I’ve already found a property I’m interested in. How do I qualify?

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Otto Dargan
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Re: Got knocked back by the mortgage insurer - 95 per cent home loan

Postby Otto Dargan » Mon Jul 15, 2019 7:33 pm

Hello Nigel. Welcome to the forums.

Anytime, you’re borrowing more than 80% of the property value, you’ll paying Lenders Mortgage Insurance (LMI). So, when you apply for a 95% home loan, most lenders don’t allow you to capitalise the LMI on top of your home loan. That means you’ll have to come up with the LMI as well on top of your deposit which can be tens of thousands of dollars. You can use our LMI calculatorto work out your LMI fee.

To be clear, some of our lenders will allow you to capitalise the LMI on top of the 95% home loan. So you can still qualify with only a 5% deposit, however, stricter lending criteria applies.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a 95 per cent home loan.

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

NigelB
Posts: 2
Joined: Mon Jul 15, 2019 7:16 pm

Re: Got knocked back by the mortgage insurer - 95 per cent home loan

Postby NigelB » Mon Jul 15, 2019 7:55 pm

Exactly, what I was looking for. My tax returns for the recent financial year haven’t been filed yet. Will lenders accept older tax returns for income verification or do I have to file my tax returns before I can apply?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Got knocked back by the mortgage insurer - 95 per cent home loan

Postby Otto Dargan » Mon Jul 15, 2019 9:01 pm

Hi Nigel,

Yes, lenders will accept your older tax returns if you haven’t yet filed your tax returns for this financial year.

Each lender has its own method of calculating your self-employed assessable income from your tax returns. Some lenders will use the average of the two years taxable income, while some will use the lower of the two years and others may use the lower of the two.

A few also use the latest tax returns income figure for assessment.
You can use our self-employed income calculator to get an estimate of your assessable income.

The key is to apply with the right lender.

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


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