95% LVR + LMI home loans

Hi property chat,

Sorry if this question has been asked before, anyone know of any good lenders that will use a rental ledger in lieu of genuine savings, and let you borrow past 95% when you factor in LMI? Our true LVR will be 92-93% but once lmi + stamp duty is added this pushes us past 95%.
We know of one lender, but the interest rate is in the high 4's, and were hoping for something a bit more palatable.
We are aware most people don't recommend levering this high but given our situation we are needing to get into the market and the numbers seem to check out given the projected growth in our area.
Any recommendations appreciated!

 

ANZ up to 97% if you're an existing customer with credit for more then 6 months

Bank west and Bank Australia does up to 98% I believe, but not too sure about rental ledger as gen savings.

 

Better Choice can consider a combination of savings and rental ledger. Rate is under 4%.

 

I think you have asked similar question before, yes?
You can't fund the stamp duty costs by the way, they come out of your deposit.
Don't expect the best rate on the market at that LVR either.

My recommendation is, get a decent broker already!

 

Any loan over 90% makes me very nervous. Above 95% puts the borrower at significant risk (and cost).

If you want a significantly cheaper loan with much less hassle (and less chance of rejection), find a way to get the LVR to 90% including LMI and other costs.

 

With proper assessment (of lender policy and serviceability) discussions with lender BDM's & Credit etc a Broker can mitigate the risk of decline to a certain point.
Trying to DIY can potentially end in multiple declines and damaged credit files/scores (all important to being able to borrow at the high LVR)

@Jay Coffer - you might be able to reserve a spot in the Governments FHLDS, meaning no LMI at all. Depending on a few factors though.

 

FOMO is causing a lot of people to consider these high LVR's just to get into the market, at any cost

 

Thank you all for your input. We have been shopping around quite a bit. At this point we have spoken to around 6 seperate brokers (obviously haven't put any official applications in as of yet, to potentially damage our credit file with multiple requests). My consideration is that a high interest loan will push us close to the edge when interest rates inevitably go up, as we'll be getting close to our serviceability limit. However, we've recently spoken to a broker that has managed to tentatively promise an interest rate in the low 2's, with an lvr pushing 98%. We have done our due diligence on the broker and it all seems to check out. Our thought process is that we ride the growth over the next year or so in a fiery market and hopefully build a little equity.

 

Also, we're planning on fixing the interest for around 3 years to mitigate a bit of risk.

 

There are some second tier lenders offering low rates for 98% LVR (Inc LMI), you might find the variable rates with these lenders are lower than their 3 year fixed rates too, a split loan (part variable, part fixed) can be a good option, especially if intending to pay more than the minimum monthly amount.
I'm sure your broker will discuss that with you

 

Realisticallly, assuming P&I, how much of your income will be going to repayments? You are putting all your savings into a property you are stretching the LVR to get, because you are afraid it will go up even higher. What will your savings rate look like after you buy? Could you handle emergency repairs, or any other emergency expenses?

 

Is there anything to be wary about with these "second teir" lenders?

 

Our repayments should be roughly 35% our take-home salary

 

And how much will you save of your net pay after repayments?

 

we should still be able to save around 30% of our take-home salary after paying P&I at around 2-3% interest

 

Is the rental ledger for the lender taking into account that if one moves into the property as a PPOR they wouldn't be paying that particular amount as rent and could then use it to service the loan i.e. the rent factor into the loan serviceability?

 

Rental expense is never included in serviceability if you are buying an Owner Occupied property.
The rental ledger forms part of the genuine savings requirement, most lenders require applicants to show they have the ability to save at least 5% of the property price when the LVR is more than 90%, some lenders will accept rental expense towards the genuine savings requirement