Hi All,
I'm planning to purchase a house before the FHOG expired. I'm looking at property value between $370K – $380K.
Can someone please let me know whether I can get a loan with my situation and which lenders can I get the loan approved.
Income – $80K before tax.
No saving/deposit.
employment – 3+ yrs
No credit cards or other repayments.Is there any bank that allow you to borrow 100% of property value?
How much LMI do I need to pay for a $370K loan ?
Thanks in advance.
Shame you hadnt posted yesterday as 1 of the 2 remaining lenders withdrew their 100% product.
There is one lender who may look at the application but i feel even with the FHOG you maybe short of funds to complete depending in which State you are buying in.
At 100% it is not a mortgage insured loan but a risk fee charged by the lender which is roughly the same premium.
You may get a stamp duty discount in cedrtain States but will still have your Solicitor costs etc.If you are thinking of buying and require a 100% loan i would do it fairly soon as i think it iwll be gone within the next 4 weeks.
Richard Taylor | Australia's leading private lender
Thanks Richard.
I rang up RAMS just then, they still accept 100% loan. However, I am not too sure about their loan package. Do they offer an offset account and discount interest rate?
BTW I forgot to mention, I have my parent's property as a guarantor. However, they still under finance with Comm Bank. Still owing around 45K.
My loan application to Comm Bank has been declined because they won't accept my parent as guarantor due to their old age? Which it doesn't make any sense.
Is there any bank that accept a property with another lender as security.
Many thanks.
rko
No Rams do not offer an offset account as they are not a retail lender although actually owned by a retail bank.
Your parents can only offer their property as a guarantee is they can show they can afford to guarantee the loan.
They would be better off to borrow a deposit and gift this to you and then you arrange a loan for say 90% LVR and cover the repayments on their 10%. You could take an Interest only loan on your 90% and P & I on their loan which you pay off as quickly as possible.
This way they can still use the equity in their home and are not providing a guarantee for your borrowing.
It is a cleaner, easier way and one we use with clients all the time.
There are still 1 or 2 lenders left that do not mind where the deposit has come from.
Richard Taylor | Australia's leading private lender
Anything over 80% will incur LMI, when they are involved they want to see where the deposit money is coming from and want to see records of genuine savings. you can pay up to $10,000 for high end LVR loans over 95%. the old Rams were good for this as they were able to over come the LMI problem by providing in in house Mortgage insurer but now they have lost that facility they have to conform with genworth and PMI conditions that means no more 100% loans and this is the same with Guaranttee loans the terms and conditions placed on these loans by LMI make it near impostable to get through.
OK what are your options?
looking at property value between $370K – $380K
Income – $80K before tax.
No deposit
Good work historyAssuming
PAYG
clear credit.
single no dependents
borrow capicity at todays rate $500k
Retired patents with unencumbered property.Scenario
Patents take out a lo doc investment loan LVR <60% purpose of the loan is for future investment
Borrowing amount to fund 20% deposit. at such a low risk, LMI is not involved and bank will ask no questions as long as they get an account with a direct debit set up for the monthly payments. this can be in anyone name as long as the payment is made the bank won't care. There are still lender offering these type of loans. It is far easier than setting up a reverse mortgage.Now you have your deposit you can purchase your property and set up an 80% loan basic mortgageand pay no LIM.
If all parties are in agreement you will have your home and quite easily be able to pay for both loan no questions asked, simple process when you take out LMI.
think outside the box
Cheers
So the above 'broker' advises gettng someone to convince their aged parents to get a 'lo doc ' loan so they can fund a deposit with someone with no savings? Did I read that right?
No wonder the industry is in such as mess, and we see things daily going on that have people loose what litlle faith they may have had in the industry altogether. I could add more, but will refrain – and certainly dont want to tar all in that area of the industry with the same brush………Fair dinkum……
bfantastic wrote:Anything over 80% will incur LMI, when they are involved they want to see where the deposit money is coming from and want to see records of genuine savings. you can pay up to $10,000 for high end LVR loans over 95%. the old Rams were good for this as they were able to over come the LMI problem by providing in in house Mortgage insurer but now they have lost that facility they have to conform with genworth and PMI conditions that means no more 100% loans and this is the same with Guaranttee loans the terms and conditions placed on these loans by LMI make it near impostable to get through.OK what are your options?
looking at property value between $370K – $380K
Income – $80K before tax.
No deposit
Good work historyAssuming
PAYG
clear credit.
single no dependents
borrow capicity at todays rate $500k
Retired patents with unencumbered property.Scenario
Patents take out a lo doc investment loan LVR <60% purpose of the loan is for future investment
Borrowing amount to fund 20% deposit. at such a low risk, LMI is not involved and bank will ask no questions as long as they get an account with a direct debit set up for the monthly payments. this can be in anyone name as long as the payment is made the bank won't care. There are still lender offering these type of loans. It is far easier than setting up a reverse mortgage.Now you have your deposit you can purchase your property and set up an 80% loan basic mortgageand pay no LIM.
If all parties are in agreement you will have your home and quite easily be able to pay for both loan no questions asked, simple process when you take out LMI.
think outside the box
Cheers
All good other than the committing fraud bit.
Yes no wonder i go greyer by the day in this industry.
What next.
Richard Taylor | Australia's leading private lender
Might end up in jail…
very scary providing un-professional advice
sorrythis was just a scenario never to be used as advice
And Noted That "all parties must be in agreement". Or should It be said that the terms and conditions need to be set out in a fully signed and witnessed legal document set out by legal representation. starting that the age patent are of sound body and mind and want to help out their child.
But this is not FULLY informed consent … therefore can't hold in the court…. stilll jail
bfantastic wrote:OK what are your options?
looking at property value between $370K – $380K
Income – $80K before tax.
No deposit
Good work historyAssuming
PAYG
clear credit.
single no dependents
borrow capicity at todays rate $500kIs that right? someone on $80k can borrow $500,000?
$80,000 after tax per month = $5063 (before any HECS repayments)
Repayments on a $500,000 loan at 5.75% for 30 years = $2917.86
Or almost 60% of after tax income.I've seen the postings re: banks tightening LVR, but are they doing anything re: tightening of loan servicing requirements? $500,000 seems an awful lot to borrow on an income of $80,000.
[/quote]Dan
Yes it is a lot to borrow and I would want to be putting a client in a loan of that size or multiple of income.
Like anything in this world most things can be done it is just the cost of doing it.Richard Taylor | Australia's leading private lender
single person
Bank calculated living expenses $13.344pa
No debt
no dependents
Income $80,000pa Gross
Bench mark 8%
max borrowing = $503,385bfantastic wrote:single person
Bank calculated living expenses $13.344pa
No debt
no dependents
Income $80,000pa Gross
Bench mark 8%
max borrowing = $503,385I don't disagree with the calculations, or the ability to get the loan, it just seems an awful lot to borrow on that income. My wife and I earn $150k between us, and have a mortgage of $400k, but the CBA boffins said we could borrow up to $850k. We politely declined, as we wouldn't have felt comfortable, on our incomes borrowing that amount of money.
If this person on $80k borrows $500k, 60% of their after tax income would be going on mortgage payments.
Just because the bank says you can, doesn't mean you should.
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