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85% LVR, No LMI, PPOR, IO.

Discussion in 'Property Finance' started by Sonamic, 11th Sep, 2015.

  1. Sonamic

    Sonamic Well-Known Member

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    One for the Brokers. I'm sure I'm not the only one thinking of doing this Refinance while it's on offer to have Cash aside for a rainy day future move before the door gets nailed shut for indeterminate time.
    Which banks are currently doing 85% no LMI? Are any of those banks offering IO on a PPOR with 100% Offset? Or am I chasing a ghost?
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Westpac & St George group.
     
  3. Redom

    Redom Mortgage Broker Business Member

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    Depending on your profession, may even be able to get the same deal at 90 with St George, Westpac (or CBA). Otherwise, that 85% no LMI will apply. May need to verify purpose of equity release funds at above 80% though, it will be treated as an LMI deal.
     
  4. Watson1

    Watson1 Well-Known Member

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    Yep, Westpac are offering 85% waiver and STG are offering a refund, I believe.

    Westpac's deal is slightly better as STG refund requires loans to be 85% inclusive of LMI so essentially you can squeeze an extra ~1% equity.

    Therefore, Westpac the loan will be 85% plus capitalised LMI vs STG who require loan to be 85% inclusive of LMI. I could be wrong about the Westpac policy though.
     
  5. Antimage

    Antimage New Member

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    Is it true the 85 No LMI deal is only for new purchases and not for refinancing?
     
  6. Sonamic

    Sonamic Well-Known Member

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    Thankyou Peter. Westpac is on the to do list.

    @Redom
    Alas, I am but a lowly automotive technician. The purpose is for an Equity Release refinance on current PPOR to shake out 75k for a future PPOR upgrade. When this upgrade occurs is yet to become clear. So in the meantime Funds will sit in the Offset. Could be months, could be years. It does sound like it is only for new lends though, not just new business?

    @Watson1
    The object of my plan is to avoid LMI altogether. I see no benefit of paying LMI on a PPOR refinance. Current LVR is about 65% and easily managed. So the thought was Cash Out up to the 85% now and have a larger PPOR Deposit On hand for when the time comes and let the IP's do their own thing.
     
  7. Redom

    Redom Mortgage Broker Business Member

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  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Westpac's servicing isn't as strong as St George but their pricing is super sharp so if you can service the debt with Westpac then you should be getting a rate of 4.20% or lower depending on the loan amount.
     
  9. Sonamic

    Sonamic Well-Known Member

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    Would be about 365k. About to do a value add to punch into the 500k bracket, but 365k @ IO keeps it within rental price to hold when it converts to an IP if and when the future upgrade of PPOR eventually comes.
     
  10. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    The other good thing about St George and Westpac (as well as ANZ) is they use VMS valuation platform and often you punch in the approximate value of the property and it comes back quite good. I think this is a real advantage with these lenders.
     
  11. Sonamic

    Sonamic Well-Known Member

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    Thanks @Shahin_Afarin

    St George is an offshoot of Westpac in a roundabout way though isn't it? As in using Westpac funded monies for their product. Much like CBA funds Aussie Home Loans product.
     
  12. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Its complicated.

    Their credit managers (not assessors) have access to see Westpac accounts/account histories and vice versa and there are credit managers who are cross skilled to assess cross both lender applications.

    Whilst at a very high level they share similar policies - there are noticeable difference in polices between the 2 lenders. Generally speaking St George has the superior policy set, for example, Westpac only does 70% for expats whereas St George will do 80%. St George will do 3 and 4 units construction whereas Westpac can only handle 2 under resi lending. St George's servicing calculator is more generous than Westpac as they take into consideration negative gearing.

    Product wise Westpac is edges out St George. They do unlimited offsets whereas St George is limited to 5 before they whack you with another package fee (although you can get it waived). Westpac calculates interest only loans properly. Westpac's post settlement process is amazballs. St George is not as good.

    So yeah similar in many ways but different in other ways. Westpac also uses its little sister to increase/decrease certain types of lending.
     
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  13. Sonamic

    Sonamic Well-Known Member

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    Yes found that out the hard way earlier in the year. I was refinancing 2 across to Aussie, then had Finance Contract ready to sign for a third as a Construction with CBA when they flagged it due to "talking" with Aussie. All 3 were being processed at the same time, so that had a lot to do with it I imagine. Could have all turned up in the same office at the same time as far as I know. 2 Aussie Loans Settled, and ended up doing Construction through NAB.

    So to summarise Westpac is the pick.
     
  14. SaberX

    SaberX Well-Known Member

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    Found Westpac servicing difficult becuase the 4.20% and below you get on the 85% , assessed at P & I monthly repayments - no issue, but it's the fixed expenses per month they throw on you (which for most people at a minimum begins at $1,700). THey then throw on 0.25% of the loan amount as a 'buffer'....

    The end result is an easy to service 'interest only' 85% no LMI becomes $2k per month repayments on a 450k loan for example in P & I repayments from a servicability POV, plus $1,700 fixed living expenses PLUS 0.25% loan buffer which comes up to around $1k...

    the end result is a servicability requirement of about $4,700 a month... quite abit for many! Not sure how generous the SGB servicability is and their buffers, but being owned by Westpac I assume not that great?

    I could make the cut when assessing under say bankwest or the likes of BOQ, so i guess bankwest still had a more generous servicability calculator for eg.
     
  15. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    St George's servicing is slightly better but ultimately the reality is that most lenders' servicing has become tighter. NAB is still the only mainstream lender that has an advantage when it comes to servicing over other mainstream lenders but like most things its all a case of how long this will be. Westpac's probably had one of the biggest changes to their servicing calculator.

    Some lenders like ANZ have had minimal changes as their servicing calculator was rather conservative to begin with.
     
  16. Sonamic

    Sonamic Well-Known Member

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    Are NAB in this space? And are they down to 4.20% ish for PPOR if you have IP with them also?
     
  17. Redom

    Redom Mortgage Broker Business Member

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    Depends on loan size @Sonamic, but should be able to do that on P/I repayments at 750-1mill+.

    No to the 85% LMI offer, but do get a $1500 rebate or points on O/O lending now with NAB. Making a push to get more business.
     
  18. Sonamic

    Sonamic Well-Known Member

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    Thanks @Redom.
    In this case 2 Loans would only get to 730k. And that's taking the PPOR out to the magic 85%. 660k without the 85% assist. Not quite worth the hassle. Yet.
     
  19. Sonamic

    Sonamic Well-Known Member

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    Any Lenders still have this threads deal on offer?
     
  20. Speede

    Speede Well-Known Member

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