As a nurse, how much can I borrow without having to pay LMI?

Any general questions you might have in regards to loans and finance.
Harley
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Joined: Thu Sep 12, 2019 1:16 pm

As a nurse, how much can I borrow without having to pay LMI?

Postby Harley » Thu Sep 12, 2019 1:18 pm

I am a nurse currently working on a 489 visa and am applying for a subclass 189 PR visa soon. In the meantime, I am hoping to apply for a home loan. I have been working for 5 years and am looking to buy my first home. The property is valued at $550,000 in NSW. How much can I borrow without having to pay LMI?

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Otto Dargan
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Re: As a nurse, how much can I borrow without having to pay LMI?

Postby Otto Dargan » Thu Sep 12, 2019 1:39 pm

Hello Harley. Welcome to the forums.

The best way to avoid paying Lenders Mortgage Insurance is to have a big deposit so you can reduce your loan to value ratio (LVR) to below 80% of the property value.

However, since a nurse is considered a low-risk profession by some lenders, you might qualify for 85% with no LMI, if you meet the following requirements:
  • You cannot borrow more than 85% LVR.
  • The maximum loan size is $1.5 million.
  • Your credit file does not have any adverse listings.
  • You have a steady income.
  • You have stable employment.
  • The property you are buying is owner-occupied.
Also, since you are currently on 489 visa, it’s best to wait to get a permanent resident visa first before you start your loan application process. As a PR, you get the same benefits as an Australian buying a home and you are exempt from foreigner stamp duty charges and you will not require Foreign Investment Review Board (FIRB) approval.

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

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

Harley
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Joined: Thu Sep 12, 2019 1:16 pm

Re: As a nurse, how much can I borrow without having to pay LMI?

Postby Harley » Thu Sep 12, 2019 2:13 pm

I am still repaying my car loan and credit cards as well, so I am not able to save as much as I would like. However, I have not defaulted on my payments. What other ways can I avoid paying LMI besides saving a large amount?

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Otto Dargan
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Re: As a nurse, how much can I borrow without having to pay LMI?

Postby Otto Dargan » Thu Sep 12, 2019 3:47 pm

Hi Harley,

If you cannot save up for a deposit, there are other ways you can avoid paying LMI:
  • Try to reduce your loan amount, since the larger the loan amount, the higher is the percentage of the loan amount the insurer will charge. Even when you're borrowing only $300,001, reducing your mortgage by just $1 can save you as much as $800.
  • Different lenders and insurers have different LMI premiums as they assess the risk of loan types, loan amount and types of borrowers in different ways and set prices for their premiums accordingly. It's best to apply with a lender that uses a discounted LMI provider. Calculate your LMI by using our LMI calculator.
  • Using a guarantor, you benefit from avoiding paying the insurance and also can borrow up to 105% of the property value.
Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Harley
Posts: 3
Joined: Thu Sep 12, 2019 1:16 pm

Re: As a nurse, how much can I borrow without having to pay LMI?

Postby Harley » Thu Sep 12, 2019 4:00 pm

Thanks for the reply. Just curious to know how much I would actually save after getting my PR, cause the property I am looking at might be sold soon.

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Otto Dargan
Mortgage Specialist
Posts: 7698
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Re: As a nurse, how much can I borrow without having to pay LMI?

Postby Otto Dargan » Thu Sep 12, 2019 4:18 pm

Hi Harley,

For a property valued at $550,000 in NSW, you will be paying $5,700 for FIRB approval and you also avoid paying foreigner stamp duty surcharge which would save you over $60,000.

Furthermore, you also get to apply for a First Home Buyers Grant which in NSW is $10,000 to purchase a new home of up to $600,000. If you’re buying an existing home, you’ll receive stamp duty exemption.

Taking this into consideration, you could be saving over $65,000, which you could put down as a deposit and reduce your LVR to avoid paying LMI.

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

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


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