What should I do to avoid LMI

Hi all,

I’ve recently found an apartment that I would like to buy at a good price. I’m in NSW, using CBA. I’m a first home buyer

Ive Signed the 10 day cooling off period contract which begins on Monday 22/11

I have pre approval for a bank loan. Only issue is that type of pre approval has Lenders mortgage insurance and a 10pct deposit calculation.

The contact that is being offered states that they will accept a 5 pct deposit.

I submitted my tax return late ( last Monday 15/11). I need the ato notice of assessment to the bank by 26/11 to get an lmi waiver to be able to put forward a 5% deposit. ( first home deposit scheme)

In less than ten days, should I

(A) pray and wait for the ato notice of assessment to be issued by next week

Or (B)

cancel my current pre approval and apply for a new loan with a guarantor as to avoid paying lmi and to be able to use a 5% deposit?

Stuck in such an odd situation. If I cancel the current pre approval, will the new loan pre approval and processes beyond be in time for settlement?

If B doesn’t work out, I might have to cool off

Any advice valued

 

Are you getting confused between the loan deposit and the contract/sale deposit?

 

Hi there, I might be. If you could please help explain it

 

Even if you go down the path of a guarantor loan, you might be in trouble with timing.

Cba's process on guarantor loans isn't best and you still need your NOA, thus you might as well just stick with your FHLDS application.

 

It sounds like you don't have a FHLDS spot currently - pending the NOA?

Is it a brand new property or an established property? If it isn't brand new, I am not sure if CBA will have any spots available for the established property scheme.

If you're looking at guarantor, do your parents have a loan on their property? If it is with CBA then you might be able to get it done in time, but if it is another bank then it'll be a struggle as they need consent from that other bank. You'd need to resubmit your current application with CBA for a guarantee.

Can you pull together a 15% deposit? There are options with $1 LMI there, or there is a lender with 90% LVR LMI waiver however their criteria is quite strict and rates a little higher.

Otherwise, if proceeding with 90% LVR and LMI, CBA don't have the cheapest LMI in any case and rates tend to be pretty average >80% LVR.