Ideas to buy more properties while hitting serviceability wall

Please tell me... what's DUA? Its something i've never heard of before.

 

designated underwriting authority....

some banks have to send all LMI deals to their insurer for sign off.

when you have DUA, you can sign off LMI deals internally. No need to get the insurer to sign off.

 

Ahh.. thanks @euro73.

 

Servicing is comfortable but I think nab need 1.25 dsr for loans over a mil?

 

Liberty and Firstmac as well as Some Credit Unions.

 

Yes I do though we do all the lenders if necessary. I have an investment property with CBA loan that is over 5% and the only way I can get less is to fix it for a year or two. The other loans I have are around 4%. So CBA is a bug bear of mine. There are good reasons for hanging in with them though.

 

Why can't you get it down? It must be a tiny loan?

 

Following up from this spoke with some big wigs at Genworth last week. Servicing/Assessment now alines - so shouldn't have the issued use to have years ago where would service witht he bank off to GW and comes back fail. There are some minor policy differences, mainly more postcode restrictions. More talk to have these alined - so same policy as the bank for all.

And best of all likely to see DUA increase from $1M - won't be a case of if but more so when.

 

That can be the only scenario I can think of - as in every other circumstance it should be well under 5%. Not sure why you'd get upset about having a loan somewhere where it clearly doesnt fit.

 

Brady, hope you are well mate!!!

I've heard the DUA has been increased to $1.5M now for CBA. Is that correct?

Also - Will an assesment only be passed onto Genworth is lending with that specific lender (ie CBA) goes above the DUA limit or does it include total value of loans with all lenders within a portfolio?


Cheers
Andy

 

Hasn't been increased yet, from what I'm aware of. My understanding is that it's on the cards.

Not sure if I exactly understand your question. Each bank has its own arrangement with their insurer, some don't have DUA others who do have different limits. Each limit relates to that particular bank. So if you have loans with different banks who use the same insurer it doesn't come under the one limit. Part of the reason why many brokers target multiple banks to keep inside DUA. Which was particularly important when there was different assessment at the bank compared to the insurer

 

That makes sense...You covered my question!

 

2 seperate applications of 990k won't go to genworth. Neither will a $200k app if you already owe the CBA $900k.
Around $2.5mil 'total exposure' means a look over by LMI or a higher level of credit for most lenders.

 

• The total aggregate (LMI insured) facilities exceed $1 million.

A $200k CBA application with LMI should go to Genworth when you already have a CBA $900k Loan with LMI

But if the $200k application was with a different bank who also uses Genworth, it wont impact.

 

That hasn't quite been my experience, but it's not consistent either.

If the first loan is now at an 80% LVR it might be that they ignore it. I have heard comments like, "Insured funds < $1M".

 

I know what you mean @Peter_Tersteeg but technically even though the loan is now <80% LVR it's still insurered through Genworth, so that facility would still come under the total aggregate (LMI insured) facilities. If you were to rewrite the 80% loan might be a different story. All very odd but more so at if something was to happen and the bank went to claim, Genworth wouldn't be paying the bank because it would be outside of policy. So makes sense that the bank shouldn't accept.

 

What is meant by 'making sure your IO periods are sorted'. When you take out a loan isnt the IO period set for 25-30yrs? I am only 5yrs into my loan with CBA.

 

IO periods are generally a max of 5 years. Then it reverts to PI.

Some lenders allow 10 years and some used to allow 15 years - not sure if this is still possible.

See
Loan Tip: Ticking Time Bomb of Interest Only Loans Expiring Loan Tip: Ticking Time Bomb of Interest Only Loans Expiring

 

The IO period is usually set for five years and then it turns into P&I. Depending on Lender, you may be able to extend the IO period with a form, otherwise a full application is required. Depending on servicing, a full application may or may not be possible.

With CBA you should be fine with a form.