Browse Forums Home Finance 1 Feb 13, 2011 6:13 pm Hi everyone, Am new to this site. Hoping you might be able to help me with my question - My husband and I are looking to buy land & build. We are going to put down 10% deposit on our loan, pay stamp duty & settlement costs out of our own pocket but add LMI on top of our loan. If our lvr is 90%, I take it will increase if we add the LMI on top? I have calculated our LMI to be approx $11,000 based on the Genworth calculator, so am I correct in saying our LMI will increase to 91.83%? This is based on a purchase price of $600,000. Will the banks be ok with this? Or, if you add the LMI on your loan does it not effect the lvr? We are not first home buyers so won't have any grants. Re: Home Loan Deposit & LMI 2Feb 13, 2011 6:48 pm HI Arabella11. Adding the LMI would increase your LVR but will not impact the amount of LMI payable. Meaning if you have to pay $11,000 LMI- that's it! even when you add this to the LVR it doesn't matter, LMI remains the same. In terms of "if the bank is ok with this or not" -it depends on the lenders, some have MAX 90% lvr...some allow MAX 90% LVR + LMI. Have you considered ING?? they offer a reduce LMI for LVR up to 95% ...so instead of paying $11,000 it be around $6,000 Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Home Loan Deposit & LMI 3Feb 13, 2011 7:05 pm Thanks for your reply Michael, much appreciated. Am I correct in saying then that our lvr will increase to 91.83% by adding on LMI? Based on purchase price of $600k, deposit of $60k & LMI of $11k? Just trying to work out what our overall lvr would be by adding LMI. I haven't checked out ING because I thought their rates would be higher. Is this likely? Re: Home Loan Deposit & LMI 4Feb 13, 2011 7:21 pm Arabella11 Thanks for your reply Michael, much appreciated. Am I correct in saying then that our lvr will increase to 91.83% by adding on LMI? Based on purchase price of $600k, deposit of $60k & LMI of $11k? Just trying to work out what our overall lvr would be by adding LMI. I haven't checked out ING because I thought their rates would be higher. Is this likely? Yes you are right your LVR will be 91.83% - so you have to make sure your lender allows LVR over 90%. Which lender and product name are you applying for? and i will able to tell you. ING has good rates, not the "lowest" but with a current rate of 7.12%, branch access, Offset account but with a ~$350 annual fee. Either way at 7.12% ( for a full feature loan) it's rate worth looking into. I mean there are 100's of product out there and a handful that would beat this rate with the full features. But ING is one of the few that allows a reduce LMI. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Home Loan Deposit & LMI 5Feb 13, 2011 7:36 pm Thanks! I am happy with a 91% lvr! Would obviously like it to be lower but am happy with this. I haven't really looked properly into many products. Just had a quick look on the ING website & from what I saw they only lend to 90%. Is that correct? I was thinking maybe BankWest as they lend to 95%. Are a majority of lenders lending to 95% these days? Thanks so much for your help! Re: Home Loan Deposit & LMI 6Feb 13, 2011 7:39 pm LVR - stands for Loan to Value Ratio. LMI does not form value on the loan, therefore you will need to cover this yourself or as you have said - increase the LVR of your mortgage. Note - valuations for build contracts have been coming in lower than on contracts, which will mean that LVR may need to be higher. Re: Home Loan Deposit & LMI 7Feb 13, 2011 7:57 pm Arabella11 Thanks! I am happy with a 91% lvr! Would obviously like it to be lower but am happy with this. I haven't really looked properly into many products. Just had a quick look on the ING website & from what I saw they only lend to 90%. Is that correct? I was thinking maybe BankWest as they lend to 95%. Are a majority of lenders lending to 95% these days? Thanks so much for your help! There are some products or features that the "general" public does NOT have access to- only brokers are able to place a 95% LVR with ING currently and that is the norm with a lot of another banks as well... Most brokers like myself offer a free service, so there is no harm in asking- just drop us a email and we promise not to bite Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Home Loan Deposit & LMI 8Feb 23, 2011 2:23 pm I just had an issue with LMI. We just got approved for finance (or so we thought) we had 18% of a deposit and because 2% of that fell into the LMI (as the valuer valued my investment and it came back lower) we received a call from our broker saying that we weren't going to get the approval. they saw us as a risk...living at home (don't know how?) Mind you I have an investment property and use equity + all deposits...so it's either sell my investment for try find an extra $10,000 Home Loan Deposit & LMI 9Feb 23, 2011 2:36 pm Are you going for a loan through the same finance co as your investment loan? Reason I ask if it is strong enough deal the lender can always ask for an exemption from LMI. I got a few through - the largest being at 85% due to the customers being strong deal and valued customers. Some things are worth waiting for. Re: Home Loan Deposit & LMI 10Feb 23, 2011 4:13 pm Nah we are with ANZ for all banking, but the mortgage broker has change us over to Homeside as their interest rate and loan package was better than ANZ - as I have the investment. I was saying that to my partner...it's only 2%...we were told by family members to try go through our bank (ANZ) but I have no idea how that will go with the application process...we will have to get ALL our documents ready...the application through Homeside was done at the start of November and got declined yesterday!! So long... Re: Home Loan Deposit & LMI 11Feb 23, 2011 8:35 pm mak_ I just had an issue with LMI. We just got approved for finance (or so we thought) we had 18% of a deposit and because 2% of that fell into the LMI (as the valuer valued my investment and it came back lower) we received a call from our broker saying that we weren't going to get the approval. they saw us as a risk...living at home (don't know how?) Mind you I have an investment property and use equity + all deposits...so it's either sell my investment for try find an extra $10,000 Did the broker explain why your were declined by the LMI provider? Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Home Loan Deposit & LMI 12Feb 24, 2011 8:30 am Yeah because the valuation on the investment came back less(which made the re-financing and depost percentages change) and the LMI people didn't wan't to give the insurance to us as they saw us as a risk. That's all the broker told me. So they asked my permission if they could get a 2nd opinion from an ANZ valuation, they should be going out this week. it's quite stressful!! I never went through this on my 1st property brokers will also be in a position to get you a better rate than the advertised rate most times. 6 6116 The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 13528 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 31784 |