APRA created drought causing Non banks to run out of funds ?

Heaps still do this, just depends how you service.

 

That is interesting, cheers!

 

Damn, this is worrying.

I'm about to go through with buying my first property. I have enough saved for 80% LVR, but have been looking at 88% LVR so I can accumulate a couple of properties slightly faster.

But am I better off going in at 80% LVR? Especially now with how tight things are getting? I'm worried if I go in at 88% LVR, the LMI I'll be paying will be useless as I still won't be able to buy a second property with the extra cash in hand.

Hope that made sense.

 

Probably not.

If you're planning on purchasing multiple properties than borrow 88% now - and use the left over funds for the the next purchase.

If you borrow at 80% - you might have a hard time trying to release equity up to 88% .....so it makes sense to borrow at a higher LVR for the purchase.

Cheers

Jamie

 

I agree with Jamie.

Get it while you can.

 

Also agree with do it IF you can.
You will be able to add to the leftover funds and get to the next one quicker. Also good to have that buffer just in case.
And you should be able to add the LMI to the loan, deductible over approx. 5 years.

 

No more servicing existing Firstmac loans at actual repayments. This is an interesting move by them. Keeps the channel open for new business using other banks actuals but keeps them from accumulating too many under their own balance sheet.


Effective from Tuesday the 1st of September, all existing Firstmac loans will be assessed at the assessment rate when applying for further lending. This only applies to existing Firstmac loans.

If the remaining loan term on an existing Firstmac loan is less than 25 years, repayments for serviceability purposes will be calculated on a Principal and Interest (PI) basis over 25 years.

If the remaining loan term on an existing Firstmac loan is more than 25 years, repayments for serviceability purposes will be calculated on a PI basis over the remaining term.

This can be done by calculating a PI repayment at 7% for the existing settled loan over the relevant term (on the above basis) and add to the 'Any Other Repays pm' field in the servicing calculator.
Pipeline applicants submitted prior to 1st September 2015:If serviceability is reliant on using the actual Firstmac loan repayment for loans that settled more than 6 months prior to the application date of the new loan, the actual Firstmac repayment may continue to be shown for loans being assessed for final approval up to COB 18 September 2015.

Where Lenders Mortgage Insurance is required the loan must still service on the Firstmac Calculator.
For more information about these changes or any of Firstmac products, feel free to contact your eBDM

 

+1 for @Jamie Moore's input @Fungus.

Probably best to keep what you can aside for the next one

 

Thanks for replies, you guys are truly amazing!

I've had a play around with a LMI calculator and 88% is definitely the sweet spot. Anything over is an extra $1,000 in LMI.

 

This is so depressing ...each week we find new solution to servicing and it seems these lenders only last a few weeks before they get owned by the massive influx in application...

 

I could be wrong ( I hope i am) but he 85% No LMI still has a RISK fee...which mean it has an "LMI cost" anyway as the risk fee is 0.70% of the loan amoun.

 

Hi Mick,

The Accelerate Prime product can go to 85% LVR, with no LMI or risk fee payable. It can either be for owner occupied or investment.

The risk fee is only payable above 85% LVR.

 

Firstmac still have pretty much the lowest assessment rate out of all the lenders short of Pepper, so they're still a good option when servicing is tight - just not quite as good as before.

 

The Accelerate Prime just increases in rate the higher the LVR you go - as Shahin mentioned, no risk fee between 80-85% LVR, but there is a 0.20% increase in the rate. From 4.64 (80%) to 4.84 (85%).

 

Ohh yep the pepper product.
Was really talking about the Flexichoice funded by Resimac- NO lMI at 85%...but has risk fee.

Breaking down the Sydney lunch meeting Pepper provided 1 month ago....they have hinted they may stop the 85% NO LMI towards end of this year FYI.

 

Pretty sure your right Mick - there's a 1% risk fee for 80-85% lending on my reading of the policy doc. It basically just avoids active credit histories and any insurer issues that may arise.

This product isn't really an option for most investors anyway, the servicing calculator isn't very good and treats OFI's at 7.25% P&I, no negative gearing, average employment policy, etc.

The only good thing about it is the rate and potentially the non genuine savings options for PPORs, but there are a few alternative options in the investment rate space anyway.

Cheers,
Redom

 

what does firstmac take rental income as? 80%?

 

I'm in the process of applying for an equity release for investment from my PPOR. This is via suncorp. I am surprised that the variable rate is only 4.24%. This is much lower than I expected - surprised that I am able to get this relatively low rate in the current environment.

It will be interesting to see what happens with the application. According to the broker my serviceability is in good shape

 

The fact it's a ppor is the key