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95% + LMI and 97% Capped (PPOR and IP)

Discussion in 'Property Finance' started by albanga, 16th Jul, 2015.

  1. albanga

    albanga Well-Known Member

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    Are any lenders still playing in the 95% + LMI space for PPOR? Bankwest perhaps (clearly not on IP).

    And what about for IP's? Last time I checked, RAMS and The Rock were doing 97% capped.

    Just generally curious, not about to go buy anything at this LVR.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I think St George will, ANZ too (existing customers). many others too.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Quite a few are still doing 95% + 2% LMI for PPORs. There hasn't been any changes recently in LVR for PPOR securities. The most appropriate lender tends to depend on the circumstances, but BOM/St George/Westpac are usually on the shortlist as they're 'reasonable' with fairly simple qualification criteria.
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    PPOR's are still sweet - high LVR's and decent rate discounting. It's happy days still.

    IPs on the other hand........

    Cheers

    Jamie
     
  5. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    PPOR buyers are fine - so long as they're in an otherwise good position (non trashed credit file).

    As always though, its really worth considering the LMI cost vs saving the marginal amount more to get it over the line at 90%.
     
  6. albanga

    albanga Well-Known Member

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    Thanks guys!
    Agreed Corey for an IP but PPOR which isn't purely numbers based it can make sense from a comfort level to part with the hefty LMI and have your own place.

    Just on this I imagine if your in this space you would need to have a pretty blemish free credit. Thing is what is blemish free! I know I have previously asked this question and the answer was no one really knows. For example does no defaults, but say 15 enquiries constitute bad credit? Maybe! But what about if none of the enquiries were in the past year. Does this then make it o.k?
     
    Last edited: 17th Jul, 2015
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    There is some black art and but no science to it all

    Assume you have 15 enquiries for cards and personal loans 18 mths ago.

    Assume you no longer have those cards and loans for whatever fairy dust reason.

    Id wager almost all scoring engines will have that declined at LVR > 90 inc MI, def a place for non scoring lender

    ta
    rolf
     
  8. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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  9. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Hi guys,

    Just curious, Can't someone get a loan as ppor and immediately after the deal changes it to IP? and by pass this IP LVR tightning
     
  10. Greyghost

    Greyghost Well-Known Member

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    We got finance approved 95% no LMI. (higher rate on the 5% over 90%). Overall effective interest rate is 4.86%. The 5% is basically an unsecured portion loan bundled in. works for us.
    At 88% we could have got a better rate, but given not paying any LMI we are happy with the deal.
    BOQ Specialist (Accountants, Medico etc) is case anyone is wondering.
     
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  11. Hodor

    Hodor Well-Known Member

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    Be great to have access to no LMI deals. The amount on our new PPoR I found quite offensive at 90% + cap LMI.
     
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  12. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's deceptive but could be done.

    The property would need to be in the same location you work - you wouldn't be able to use anticipated income from the property for servicing.

    Having said that - situations do change so it's not uncommon for someone to rent out a PPOR after settlement.

    Cheers

    Jamie
     
  13. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    + if you run a successful practice you could go 105% and more LVR w/ no LMI. St George and Macquarie have very successful products in this space for Accountants, FP's, IB's and law partners.
     
  14. Greyghost

    Greyghost Well-Known Member

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    .
    Hi Shahin,
    I understand a few lenders cater to owners or partners of firms. However majority have min income threshold of $120k

    The BOQ specialist offering is for any accountant as long as they are CA or CPA qualified, regardless of income (obviously service the deal).
    I believe they are trying to leverage into that industry and professional referral network. Thus by having a CA or CPA you are deemed to be somewhat financially responsible and less of a risk.
    I thought due I no LMI I would have needed to calc the opportunity cost of a higher interest rate, however borrowings over 500k the rate is now roughly 4.2-3 at 90% lvr.. Not bad if you can then pay down debt or get cg then refi to a cheaper lender, but even then BOQ's offering is competitive enough where you don't feel like your saving on one end and paying more on the other...
     
  15. Greyghost

    Greyghost Well-Known Member

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    Hi Jamie, I know it is unethical and the broker could loose his accreditation but I have heard stories of people entering applications saying the property they are purchasing is an IP and rent of "x".
    Where their intention is always to move into it, or were not ready to sell, or it's their first property (renters) and deals would not service without rental income or by switching current O/O to and IP the larger mortgage on the property being purchased being for OO purposes would render the overall situation not servicing.

    I'm sure this happens a lot in the industry. Sure it helps the client with their desired outcome but needs to be a balance between achieving that and their best interests..
     
  16. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Hi GG I'm aware of the BoQ offering and it definitely has its place.

    What you are talking about is the St George 90% no LMI.

    What I'm talking is something different - its 105% no LMI which is a completely different product and caters for a range of additional service professionals.

    If you own the practice you are able to secure the 80% of the loan against the property and the additional 25% against your book.

    In addition to that accountants, financial planner, IB, or a real estate agent with rent rolls can borrow against their books. In the case of accountants - they can borrow up to 65% against the gross fee income (w/ Mac).
     
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  17. albanga

    albanga Well-Known Member

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    Just saw The Rock a 95% with capitalization has pulled back to 90 inc LMI and 80 in NSW for IP's.

    Are RAMS tye only one left.
     
  18. albanga

    albanga Well-Known Member

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    Bringing up an old thread but did I hear Westpac have pulled out of the 97% LVR space for PPOR??

    If so who we left with now?
    Bankwest, ANZ (existing), St George/BOM, ME Bank?
     
  19. miximitosis

    miximitosis Well-Known Member

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    Westpac and St George (I'm guessing BoM as well) are both 95%inc LMI now.

    There is still a number of lenders doing 95 + LMI including Bankwest, QCCU, Bank Australia and I think BOQ go up to 98% as well.
     
  20. tobe

    tobe Well-Known Member

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    I haven't heard about westpac changing LVR. I settled one at 97% yesterday.

    They have recently increased their lmi rates which means what used to be 94% plus lmi to 97 is now 93 and a half.