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Can I borrow 95% for IP from any lender?

Discussion in 'Property Finance' started by David B, 17th May, 2016.

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  1. David B

    David B Member

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    Hi Guys,

    I was wondering if its possible to borrow 95% of a property price from a lender, I know that is not possible with big 4 however, maybe some other lenders do.
    Do you know if I can borrow 95%?
    I want to buy an IP with a price tag of 350k or something similar and I do not want to pay 50k upfront (10% plus other expenses like stamp duty).
    I have some equity on my house but I dont want to use that for now for this IP
    Thanks
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Yeah, there's a few that will do 95% + capitalised LMI.

    Curious as to why you don't want to use any equity from your PPOR? Even a tiny amount will save you a substantial amount of LMI.
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Liberty springs to mind, they'll cap the whole LMI. Others (a couple) will go to 95% inclusive of LMI.
     
  4. 4point5million

    4point5million Well-Known Member

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    Yes you can do
    Anything you want
     
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  5. 4point5million

    4point5million Well-Known Member

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    Nice photo, you like jazz? ;)
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Yes, there are some lenders that will still go to 95% for investment purposes. They're not the mainstream lenders, you're looking at the non-conforming and privately funded lenders. Expect to pay a premium for that type of loan.

    Realistically the LMI on a 95% loan (which can't be capitalised) is so expensive that the difference between a 95% loan and a mainstream 90% loan usually isn't that much. I've had situations where I've told a client that with another $4k they would be able to lend at 90% with more favourable rates and fees.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Realistically - the sensible approach in today's lending environment (IMO) is an 88% lend with LMI capitalised on top.

    As other have said - higher LVR loans might be possible but you'll generally pay a premium for them.

    Cheers

    Jamie
     
  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    A client of mine told me last week he was offered LMI at $4500 on 85% but at 93% it was $14K.

    David, a Q : Are you using a good broker ? They would address these options which may vary with lender, property used as security, occupation and more. (eg Accountants may access a higher LMI etc).
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I'm writing a deal right now - if clients borrows 499.9k against the property they'll pay circa $13k in LMI. If they borrow a tiny bit more and push the base loan above $500k....they'll pay $19k in LMI!