Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of Mikey66Mikey66
    Participant
    @mikey66
    Join Date: 2016
    Post Count: 12

    Hi everyone,

    First post love the forum and suprised how helpful everyone is.

    I was woundering with investment propertys is there still 5 to 10% LVR loans anymore?

    I want to buy my first investment property but saving 20% will take longer then i would like.

    Thanks in advance

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    95% is still available but from what I’ve heard you need to jump through hoops to get it. 88% is the sweet spot to aim for, LMI drops significantly. One of the brokers on here I’m sure could help you out. Good luck :)

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of JerryJerry
    Participant
    @jerry_o
    Join Date: 2013
    Post Count: 46

    There are still 95% loans majority for owner occupiers.

    Qualifying for a 95% loan though is a bit harder these days due to strict assessment of different lenders with these types of deals.
    If it will take you longer to save up the 20% deposit. Try to hit the 88% LVR as LMI premiums tends to jump in high intervals above 88%. You can definitely use LMI to your advantage as opposed to saving up 20% if it will take you a lot longer to get there, property prices might move up during the time you are saving as well.

    Jerry | Mortgage Station
    http://mortgagestation.com.au/
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    Finance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne

    Profile photo of JerryJerry
    Participant
    @jerry_o
    Join Date: 2013
    Post Count: 46

    beat me to it Tony by 3 minutes. :)

    Jerry | Mortgage Station
    http://mortgagestation.com.au/
    Email Me | Phone Me

    Finance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne

    Profile photo of Mikey66Mikey66
    Participant
    @mikey66
    Join Date: 2016
    Post Count: 12

    Thanks guys!

    Seems like 88% LVR is the way to go so far.
    Do you know how much LMI drops from 90% lVR to 88% LVR or where i could go to find out?

    Thanks again.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,366

    Hi Mikey,

    Welcome aboard – you have come to a good place. I just did a quick check and saw that LMI based on a $400k buy

    at 95% is $14k
    90% is $7.7k,
    88% is $5.0K and
    85% is $4.3k

    So, you can see how things take a sudden turn Northward once you exceed 88%. I should have done 89% too – but you can do that.

    Here’s the calculator for Genworth:-
    http://www.genworth.com.au/online-tools-forms-and-reports/lmi-tools/lmi-premium-estimator

    Benny

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    beat me to it Tony by 3 minutes. :)

    :)

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    CBA, Liberty and I’m sure some others will allow high LVR against IPs still.

    However – LMI is expensive!

    As has been mentioned – 88% LVR is generally a good compromise. Credit scoring isn’t as harsh and LMI is not ridiculously expensive.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Mikey66Mikey66
    Participant
    @mikey66
    Join Date: 2016
    Post Count: 12

    Thanks a lot guys!

    Really informative and really like the calculator benny!

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Course Mikey remember the calculator is only a guide.

    2 lenders who both insure with Gemworth will quote you 2 different amounts.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of PimobpiPimobpi
    Participant
    @pimobpi
    Join Date: 2013
    Post Count: 60

    Hi Mikey,

    You’ve gotten some really good advice but I have a something to add regarding LVR.
    Although 88% LVR is the “sweet spot”, my opinion is that you shouldn’t aim for it just because it is something that is available to you.

    There are some advantages for borrowing more of “other peoples money” & increasing LVR however I believe that taking advantage of a higher risk loan (by borrowing more money) should only be done by the investors who can easily afford the 20% deposit (investors who elect to only use 12% of their money rather than 20%).

    I don’t believe that it should be used by investors who cannot afford a higher deposit amount to buy a property. I’m sure my comments would sound counter intuitive to many on here but “that’s life”.

    My Opinion: Look for the investment properties that suit your goals. Filter out which ones you can buy that you can cover 20% deposit with the funds you already have.

    Find any? If so then that’s great. If not then ask yourself why you couldn’t find any? Is it that your tastes are too high, not looking in the right places for affordability or that you need to make some life changes that help increase your deposit $ …or something else?

    Cover these questions before going for a loan of higher LVR because the investment needs to suit you, not you suit the investment. I cannot stop you from borrowing with a higher LVR but at least you can understand why you had to make that decision & felt that you had no other choice.

    Cheers & more wealth to you mate.

    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post Count: 282

    Another (hopefully) useful tip is in case you plan to do a reno/other and then refinance: check the maximum “existing business” LMI of the lender of choice. It is very possible that that LMI will be lower than the “new business” LMI, making it probably prudent to initially use no more than the “existing business” LMI.

    Yeah, lots of fun 😂

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of Mikey66Mikey66
    Participant
    @mikey66
    Join Date: 2016
    Post Count: 12

    Great insights guys loving it!

    Ì was planning on buying a Postive cashflow property. I found a few where even if I used a 5% deposit which I won’t it will still be cashflow positive.Thanks again for all your help and thoughts!

    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post Count: 282

    Great insights guys loving it!
    Ì was planning on buying a Postive cashflow property. I found a few where even if I used a 5% deposit which I won’t it will still be cashflow positive.Thanks again for all your help and thoughts!

    Yeah, love these forums too 😍

    As one investor to another, I always calculate the cashflow on 100% of the cost, not just the mortgage bit (because my money could have sat and offset another mortgage instead of serving as a deposit on this property, if that makes sense?).

    Is this going to be your first IP?

    Wishing us all a great long weekend!
    Ethan

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of Mikey66Mikey66
    Participant
    @mikey66
    Join Date: 2016
    Post Count: 12

    Yes it will be get excited

    I did do the calculations including
    Coucil rates
    Water suppy charges
    Insurance
    Real estate agent fees for dealing with tenants

    Still cash flow positiv Anthing else i missed? besides some maintenance costs here and there

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,366

    That little list of yours covers most of “the usual suspects” – the other common one (if buying into an apartment block) would be Body Corp fees. But if buying “standalone properties”, it usually won’t come into the equation.

    Benny

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    renovation/repair fees of 1% if a unit, 2% if a house (you actually pay 2% for a unit but the other 1% is sinking fees etc to the body corporate etc).

    I’m assuming this is your first property so under the land tax threshold but also adding in annual land tax payments.

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