Refinance an investor home loan with 95% LVR

Discussion in 'Loans & Mortgage Brokers' started by Thiru P, 7th Jan, 2019.

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  1. Thiru P

    Thiru P New Member

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    Good day everyone,
    I am trying to refinance a home loan as an investor that is 95% LVR. The major banks have refused obviously. Do I have any option now?

    In the past year, I have also tried Virgin Money, Peppers Money and many mortgage brokers. Sadly (for me), they run away as soon as they hear my case.

    I want to change my current provider because they do not allow me to rent the house i.e., we bought the home as PPOR with the help of KeyStart Home Loans (Perth) but unfortunately we had to move to Queensland for job so it is currently rented out with KeyStart's permission (limited only to 6 months).

    I am currently paying 5.34% variable and happy to pay anything lower.

    Thanks in advance.
    T
     
  2. Redom

    Redom Finance Strategist Business Plus Member

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    Perhaps worth giving liberty finance a go. max loan size is 500k. 95% LVR loans have a 3-4% LMI fee attached to it, so its a very expensive route. Rate is high too, but similar to your existing rate.

    May be worth speaking to a Perth specific broker and seeing if there's options that exist with the existing lender program to adjust the loan.
     
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  3. Thiru P

    Thiru P New Member

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    Thank you @Redom. I will try Liberty finance next.

    I am OK with LMI fee. I have tried many Perth brokers unfortunately they could not help me in this case.

    No flexibility with the current lender (KeyStart).
     
  4. Property Twins

    Property Twins Finance Strategists Business Member

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    Hi Thiru

    I was checking for another client recently - so yes there may be an option with a bank lender at reasonable rates in the high 4s.

    It will work out to be c. 92% + LMI capitalised to 95%

    Ultimately will come down to the valuation.

    With Liberty you are looking at a higher rate.
     
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  5. Redom

    Redom Finance Strategist Business Plus Member

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    Do you know why Pepper money said no? That may illuminate other issues that make lender choice difficult. Their risk fee model (not an LMI provider) usually opens up a little bit of flexibility vs others, so if they're saying no, its worth clarifying what the issue is exactly.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The harsh reality is if someone comes to me asking for a 95% investment loan, I tell them they need to save a bit more to get it down to 90%. 95% investment loans do exist, but they're incredibly expense and restrictive. I'd be amazed if there's anything cheaper than 5.34%.

    I do understand your predicament however. Keystart is intended to help first home buyers and don't do investment loans. However I question if they can force a sale because you had to move away. At some point it may be worth considering some legal advice if they try to force this.
     
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  7. Brady

    Brady Well-Known Member

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    If it was me personally I would be looking to refinance prior to moving to QLD... as PPOR

    Edit - just re read OP... already moved :(
     
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  8. Thiru P

    Thiru P New Member

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    They said the maximum LVR for an investor is 90% even with an LMI.
     
  9. Thiru P

    Thiru P New Member

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    Thank you. We are saving bit by bit!
     
  10. Redom

    Redom Finance Strategist Business Plus Member

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    Try ordering a few valuations on your property (desktop valuations). Perhaps there's a gem result in there that opens up options too. Usually one of your brokers can do this - best to ask them. Its unlikely given the difference required (10-15%), but I've seen stranger things.
     
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  11. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    upload_2019-1-9_22-14-15.jpeg

    so you are the one ;)