Let say I wanted to purchase an apartment for $300k
Let say that servicibility is good and banks say borrowing potential is as high as $600k
But deposit savings is low I.e. 15k
But I am a first home buyer looking to purchase in QLD thus home owners grant.Questions
Are banks currently willing to lend the 95%?
At this I would pay MLI, (mortgage lenders insurance?)how much would this be?
I presume the MLI would be added to the loan therefore. How much would my loan amount actually be for?When they say 95% I presume 95% of the value of the purchase I.e. $285,000. As a first home buyer I would not need to pay stamp duty due to concession right? I would need a 5% deposit of 15K which I have but as I would have solicitor fees building and pest etc. I could use the 7K home owner grant as part deposit right. So therefore I would have enough of the saving to cover other purchase cost. However where does the MLI fit in?..
Hi Intrigue
In most cases both of the mortgage insurers require you to produce 3 months bnak statements showing your 5% genuine savings and this is in addition to any Grant or concession you may receive.
Very few lenders offer 95% + LMI so if the lender does not then you would required to show evidence that you have sufficient funds to cover this expense. The single one off premium will vary depending on the lender / mortgage insurer and also the purchase price / valuation.
As a guide where the loan amount is less than $300K you are looking at around 2.25% of the loan amount and over 300K it jumps to circa 2.75% of the loan amount.
Even if the lender does capitalise the LMI it is usually limited to 97% so you would need to come up with the extra amount anyway.
Lenders lend against purchase price / valuation whichever is the lower.
Hope this helps.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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