LMI Investment Loan Serviceability

Discussion in 'Loans & Mortgage Brokers' started by Stevem009, 30th May, 2022.

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  1. Stevem009

    Stevem009 Member

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    Hi - just wondering which LMI provider is better for investment loan serviceability? I've done the numbers for both genworth and qbe borrowing power and genworth gives significantly higher borrowing power ($200k+ additional power). Is this generally normal across scenarios?
     
  2. Lindsay_W

    Lindsay_W Well-Known Member

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    No, although those calculators give a rough idea of Borrowing capacity, the LMI provider doesn't determine serviceability, that's done by the specific lender who has their own serviceability and policy.
    LVR really makes a difference, eg internal vs external LMI approval
    What Base LVR will you be requiring?

    I think you need to speak to a decent broker asap
     
  3. Stevem009

    Stevem009 Member

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    Cheers, will do - when do these calculators come into play?
    Leading Lenders Mortgage Insurance Provider in Australia - Genworth Financial :: Lender Resource Centre - Tools and Resources - Servicing Estimator Australia

    Service capacity calculator
     
  4. Lindsay_W

    Lindsay_W Well-Known Member

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  5. Stevem009

    Stevem009 Member

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    Will have a base of 90%, won't be going >90%
    Cheers
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Base LVR is before any LMI added.
    to have a base LVR of 90% means your final LVR will be >90% when you add LMI on top.
    If this is for investment you'll have very few lender options if that's the case.
    An LVR of 90% including LMI is more likely a base LVR of ~88%.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Most lenders have a deferred authority with their LMI providers, so they use their own calcualtors, not the Genworth or QBE calcualtors.

    @Stevem009 the questions you're asking aren't actually that important in the bigger picture and you're likley to make mistakes without even knowing it. Why don't you simply get a broker to help you rather than trying to figure out yourself?
     
    MJS1034 likes this.
  8. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    If its under a certain loan amount, LMI deals dont need to be approved by QBE or Genworth with most of the mainstream lenders as they have authority to approve it themselves.

    In addition it doesn't really affect borrowing capacity.
     
  9. HonestShiba

    HonestShiba Well-Known Member

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    I believe anything about 80% lvr at Firstmac also needs to go through the stricter servicing calc of genworth now, defeating the purpose of going with the generous servicing of Firstmac in the first place. Basically have to do 80% or lower with Firstmac
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    If using LMI, rather than FMs own LRF, then yes the Genworth/QBE calc does need to pass.

    Limited to certain postcodes and 750 k lend I recall.

    Note that in many scenarios, the LMI calcs of the insurresr are more generous than APRA lenders.

    ta
    rolf
     
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  11. Lindsay_W

    Lindsay_W Well-Known Member

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    If you need generous servicing then there are other lender options besides Firstmac.
     
  12. HonestShiba

    HonestShiba Well-Known Member

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    Believe they do not offer LRF anymore to investors, only owner occupiers, which makes things more difficult. I pass servicing for Firstmac but not for Genworth, making 88% not feasible
     
  13. HonestShiba

    HonestShiba Well-Known Member

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    Yes but I don't want to resort to Pepper or Liberty or that tier of lending yet. Resimac doesn't seem to be an option. Are there really any others on the same tier as Firstmac?
     
  14. Lindsay_W

    Lindsay_W Well-Known Member

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    Yes - are you using a Broker?
     
  15. HonestShiba

    HonestShiba Well-Known Member

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    Yes one from this forum. But I still like the discussion here and being in an environment where everyone can learn
     
  16. Lindsay_W

    Lindsay_W Well-Known Member

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    Which lenders have they looked at as an alternative?
     
  17. HonestShiba

    HonestShiba Well-Known Member

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    Big 4, Macquarie, Resimac, Firstmac, Pepper

    Only Firstmac and Pepper work for servicing, but both can't do 88% LVR. Also I wouldn't want to go down to Pepper yet even if they could do 88%, given I can still go with Firstmac and still have some left for Pepper. Is there somewhere else I can consider?
     

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