Lenders doing 90% investment loans plus LMI

Discussion in 'Loans & Mortgage Brokers' started by Mikea_1988, 4th Sep, 2017.

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  1. Mikea_1988

    Mikea_1988 Member

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    Hi Guys

    Is there any lenders out there doing 90% LVRS for investment purchases where the LMI is capped onto the loan?

    I know some are doing 90% including LMI.

    Was after a 90% lend with LMI added on top.

    Thanks
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    There are a couple of third tier lenders that are able to do it. The catch is the LMI costs almost double to the lenders offering 90% inclusive of LMI. The rates are quite high as well (and 90% loans are already high enough).

    The cost difference is less than 2% of the purchase price. If there's any way you and find enough to not need to capitalise LMI, I'd highly recommend this path.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Liberty will likley do it

    BUT but not only is there a major " captital" cost of the lmi, the ongoing rate is quite a bite

    ta

    rolf
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Liberty will likley do it

    BUT but not only is there a major " captital" cost of the lmi, the ongoing rate is quite a bite

    ta

    rolf
     
  5. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Suncorp are the last of the lot who are about to change this as they are . Been told to reconsider submitting any application for IO over 80% LVR
     
  6. Mikea_1988

    Mikea_1988 Member

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    Happy to pay P&I. Was more so around getting LMI capped to free up some cash for something else.
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Pepper will do this, there's a few others via mortgage managers and so on.
    Depending what you're using the cash is for, it may make more sense to get a small personal loan rather than paying the additional LMI. Just depends.
     
  8. Corey Batt

    Corey Batt Well-Known Member

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    Definitely possible - but the cost increase and reduction in lender options is so significant that you'd be better off avoiding it where possible. (you could effectively be paying 0.5%+ more p.a than just sticking to 90% inclusive of LMI from day 1)

    Jess' alternative suggestion is a good one - we've had a few situations where we've set this up for clients who have used an unsecured facility to bridge the gap and they clear that debt over the short term. Overall the costs can work out better than the LMI hit + increased long term rate.
     
  9. Redom

    Redom Mortgage Broker Business Plus Member

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    Just about all mainstreams that i know of have moved away from this, for a while now.
    Couple considerations:
    - perhaps an LMI waiver if under certain professions.
    - short term finance options to bridge the gap. This may be a balance of purchase price, loan amount required & servicing position (personal debt will need to be disclosed and has a much larger servicing impact than additional resi debt).

    Pepper gets you a bit stuck on a high rate, rarely the best option at that LVR - high LMI fee & not much room for re-negotation later given their funding line for your loan. Also a 25% servicing buffers kicks in (although their calculator is among the most generous for investors).