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Q: If our home was valued at $500,000 what can we borrow with no mortgage insurance? Thanks
A: Hi Frank,
Unless you are in a specific profession like medicine or law then the maximum you are generally able to borrow is 80% or $400,000. A couple of lenders will go to 85% or $425,000 with out having to pay lenders mortgage insurance.
Please let me know if you require any further information
Q: We are finding it difficult to save as we have 4 kids, paying $800pw rent and lived in the same home for 3 years. I earn $120,000 and my wife $55,000 … is there a way to borrow given we pay so much in rent, thanks?
A: Hi Sam,
If you are having trouble to save for a deposit on a house, one option to consider would be a limited guarantee (if you or your wife had family are in a position and willing to be able to help).
A limited guarantee is where a close family member (different lenders have different policies on who can offer the guarantee) offer up additional security for you to use in lieu of a deposit. This security can be in for the form of a mortgage or second mortgage over an existing property that they own or a term deposit with the lender you are using for the loan.
It is highly recommended that who ever is offering the guarantee get independent legal and financial advice before entering into this type of agreement.
A Mortgage broker will be able to review your situation and your family members situation and let you know if this is possible.
Please feel free to let me know if you any questions.
Q: I have the 15% plus the cost to buy a property, $850,000 – is there a way around having to pay mortgage insurance?
A: Hi Ben,
Depending on your overall situation and or your occupation there are a couple of lenders that don't charge Lenders Mortgage insurance at 85% loan to value ratio. These lenders may charge a premium on the interest rate for taking the extra risk of not applying LMI to your loan so you would need to weigh up the LMI amount vs the possible increase in repayments.
Lenders such as Citibank and Pepper both offer products that require no LMI at 85% but as to whether they would suit your specific needs, this would require investigation.
I would suggest sitting down with a Mortgage broker who can review your situation and then help you apply for a loan with a lender that will suit your requirements.
If you have any questions please feel free to reach out.
The 22 important questions you should ask a mortgage broker
When applying for a loan for a new home or investment property, or refinancing your current loan, an experienced mortgage broker can be an invaluable ally. Unlike when going directly to a lender, your ...
Q: We have found a property we would really like to buy but haven’t sold or even put our home on the market. Is there such a thing as a 4 – 6 months delayed settlement?
A: Hi Adam,
Settlement can be as long or as short as you like, the key is to get the other party (seller) to agree to it. To do this you may need to give a little bit away on the price (e.g offer what they are asking for) in order to have certain conditions met.
What you could look at doing is putting an offer in on the house you want to buy subject to the sale of your current house and subject to finance approval. This way you can secure this house whilst you sell your house.
Depending on the situation the sellers (or their agent) will accept the offer and take the property of the market for a certain period of time, after that time has past they may list the property again and activate a 48 hour sunset clause. This clause means that if they are presented with another offer they can give you 48 hours notice in writing to have unconditional approval or they can cancel your contract and sell the property to another party.
One way to strengthen your offer is to have a pre-approval for the purchase price based on selling your current home and present that to the seller as part of the offer to show them that you are able to afford the home.
Another way is to offer your house to the agent listing the house you are interested in to sell on your behalf, they may be more willing to recommend your offer if they know they are going to pick up 2 commission payments for essentially the once deal.
If you are interested in looking at a pre approval or approval subject to the sale of your home please feel free to get in touch and we can talk specifics.
Q: I have a very small default ($395.00 and paid) after moving around a few rental properties. I have a $30,000 deposit and want to look at a property $520,000. My income is $122,000 pa and I have a 3 year old. Is it possible to borrow 95% and will the default be an issue, thanks?
A: Hi Jacinta,
Your situation is a little bit complex so I would suggest sitting down with a mortgage broker to go over it in detail and discuss the options available to you.
In saying that I can give you high level answers to your questions;
Depending on who the default is with and how old it is there are a number of different lenders that may "ignore" the default. There are also a number of specialist lenders who will still lend to you with the default regardless. These specialist lenders offer a risk for rate product which essentially means the more riskier you are (based on their criteria) the higher the interest rate will be
$30,000 is a great deposit, but I don't think it will be enough to purchase a house for $520,000. Whilst it is just over the 5% needed, you will also need to factor in the costs associated with purchasing a property plus bank fees. The costs we are talking about here are stamp duty (even as a first home buyer you will need to pay some stamp duty at that price), Settlement agent costs (approx $1500) Council rates and water rates (approx $2,000 depending on when you buy the property) and inspection fees (pest and building should be around $500). On the bank fee side you could be looking at application fees, settlement fees and valuation fees, all we would look to minimise. The largest bank fee you will be looking at would be Lenders Mortgage Insurance(LMI), some banks will lend up to 97% to 99% to cover the LMI but I still think you would need a little bit more as a deposit.
There are options such as family guarantees that will reduce the need for a deposit but again dependant on your circumstances.
Finally how long you have had the deposit for will also need to be considered for genuine savings.
Based on the above information you should be in a position to borrow the required funds for a $520,000 purchase but things that you will need to consider;
Do you have any existing debts (personal loans, car loans, credit cards or store cards)? These will effect your borrowing capacity
Do you have a partner? Even if they are not going be to part of the purchase and loan banks will still take this into consideration when determining your living expenses.
How is your income derived? Is it all base wage or is there some overtime component, penalty rates or allowances? Most banks will treat these at 80% or less of their value. E.G if you earn $10,000 in overtime they will only add $8,000 to your income when working out your borrowing capacity.
What do you do for a living? Similar to above some lenders will allow 100% overtime and allowances for emergency service workers (nurse, police, firefighter or paramedics)
I hope some of this information helps and if you want to discuss your situation in detail please feel free to get in touch. I am located in Baldivis so pretty close to Mandurah
Q: Hey me and my partner are looking at buying our first house and
be has an abn and earns roughly 60000 a year and I earn 25000 but my credit score is only 500 so is his as well and he owes tax but his paying it off we have 30000 for a deposit as well what are the chances of us getting approved for 350000?
A: Hi Cherie,
Thanks for your question. Unfortunately I don't have a straight up yes or no answer for you. A bit more information would be required before a broker would be able to give you an answer on how much you can borrow.
A good idea would be to sit down with a mortgage broker and go over your situation in detail to find out if borrowing that amount would be possible and which lenders would be suitable.
The missing information that you could prepare for said mortgage broker would be;
- Why is your credit score 500? Is it because of defaults or just lots of enquiries?
- How much ATO debt does your partner have and what they repayments are?
- Do you have any children?
- Do you have any other debts?
- How long has your partner had the ABN?
- Is he self employed or more of a contractor?
- Where did the $30,000 come from and how long have you had it?
- Are you full time, part time or casual? and for how long?
- What are you monthly living expenses (groceries, utilities entertainment etc)
There are more questions involved but the above should give you an idea of what sort of information a broker and ultimately a lender is going to be looking for when they work out if you can borrow money and how much.
I hope this helps and good luck.
Feel free to get in touch if you have any further questions
Q: We’ve just found out we’re expecting twins and we have a 2-year-old so we’re wondering should we look at transferring our home loan from principal and interest to interest only for 12 months or so. Is this kind of thing possible and what should we be aware of, thank you?
A: Hi Steph,
First congratulation on the addition to your family.
Most banks should allow you to switch to Interest only repayments for 12 months, all you should need to do is call your lender or Mortgage Broker and explain the situation to them and ask them to make the switch. You may need to fill in some forms and pay some fees to make the switch over but it should be fairly easy.
Things to be aware of;
- Even though you will be reducing your repayments your lender may actually increase your interest rate when they switch you to interest only so in theory it will be costing you more money.
- Ask them what fees (upfront and ongoing) you will need to pay to switch to and from Interest Only
- Ask them what your default interest rate will be when you switch back to make sure it is the same as what you are paying at the moment or less.
Hope this helps.
Good luck with the new additions to your family.
Q: Hi my friend earns $1800 p/w from Uber and He is been driving Uber one year full time. Can he get a home loan with Uber income?
A: Hi David,
Typically Uber drivers will be classed as Self Employed and the follow applies in most cases;
Generally most lenders will want to see at least 2 years financials along with an ABN registered for 2 or more years. In some cases they will look at 1 years financials if they have the ABN for more than 2 years.
If he has a large deposit there are some specialist lenders that may be able to help help him out if he does not have the above. In these cases he should be prepared to pay a higher than average interest rate as these specialist lenders work of a rate for risk model, i.e. the riskier you are considered to be the higher your interest rate is.
I hope this helps your friend, let me know if there is anything else I can assist with.
Q: I own my own house and car outright and need $15000 to set up a new business. How can I borrow $15000 to get started?
A: Hi Kevin,
$15,000 is a bit low for a mortgage from most banks so your best option would be a personal loan that is secured by your car to get a slightly better rate.
You will need to meet the lending critera (e.g. have some sort of income currently and have good credit history) to be able to get a personal loan.
If you require some additional help or advice in this area feel free to contact me directly.
Q: I have a property…market value $1.3M and loan is $420k. I was hoping to increase the loan to $700k and use the additional funds for a range of investment opportunities but the bank will only approve $100k. Income is not the issue, apparently cashout restrictions!!! What does this mean and will I come across the same problem if I go to refinance?
A: Hi Andrew,
As with previous answers it sounds like you need to engage the services of a mortgage broker to find the right lender to meet your criteria.
Each lender will have a policy on cash out restrictions in regards to amount and purpose of the funds, along with finding one that will give you the amount you desire you will also want to consider the evidence they require for the purpose of the funds (think financial planner advice for investment purposes).
You should also consider a lender that will allow you to structure the loan in the most effective way. A lot of my customers in this situation will want to split the loan so they can keep track of the interest expense on the investment portions for tax purposes and some may even want to have that portion interest only depending on taxation advice th y have received from their accountant.
A great broker will take all of this into consideration along with the interest rate when finding the correct lender and loan product for you.
If you are looking for someone like that please feel free to get in touch
Q: My husband and I have full time jobs. His income is 95,000 and mine is 72,000 and our home loan is ANZ, $490,000. We just checked our internet banking and the rate on the loan is 4.62% and we would like to ask if that is too high and what should it be. We do have a credit card limit of $5,000 but we very rarely use it?
A: Hi Pam,
In this case you rate will be determined by what product you have with ANZ, and what the value of your house is. If you are on a basic ANZ product like Simplicity Plus you should expect a rate closer to 4% (at least that is what they are offering new to bank customers).
If you have a Breakfree Package you should be closer to 3.94% for variable and maybe as low as 3.88% for fixed rate loans (2yrs). Again that is what they are offering my new clients on any Loan to value ratio (LVR)
If your LVR is lower than 80% I would expect a slightly better rate, I have seen as low as 3.79% from other banks.
If you have a broker, ask them to review your situation and find a deal that suits your needs and goals and they should be able to point you in the right direction as all of the above information I have provided is generic and only based on the information you have provided.
If you don't have a broker, you should find one as they will be able to look at lots of options for you and advise is ANZ is still right for you. A broker doesn't generally cost you anything to use and they do all the legwork for you so you don't have to research each banks rates, policy and lending criteria.
Hope this helps.
Q: We are looking to refinance our home loan and want to know if the new loan has to be over 30 years. We have had our loan for 6 years and don’t want to start again. How should we structure a new loan?
A: Hi Adam,
As my fellow brokers have mentioned you can certainly refinance your loan to a new bank on the same term (24 years).
Some people opt to refinance over a longer term i.e 30 years and then increase their payments to the amount that will allow them to close the loan off in the required time. They find that this gives them options in the future if something should happen and they want to quickly reduce their payments e.g become unemployed or sick, start a family etc.
A broker will be able to sit with you and go over your current loan setup and then discuss your short and long term goals and provide a solution that is going to help you achieve these goals.
Should you want to chat about your specific situation I am located in Baldivis and happy to meet to discuss.
Q: What would be more likely to be accepted by the bank for a land & house package loan.
My credit history is good with no defaults, just credit inquiries. Also I have a personal loan where I owe the bank $25000 and making my $880 monthly payment on time.
I am looking to get a home loan for $400000 from the bank and have got $40000 in savings.But I don't know if I should pay off my personal loan first then I have less deposit or I could get the home loan without paying my personal loan.plz help?
A: Hi Moe,
By the look of your situation it is all going to come down to your current income and employment situation.
As long as you have the income to support the home loan and personal loan most lenders will be happy with the 10% deposit you have saved. The fact that you can show consistent repayments on your loan is a good thing
If you pay off your entire personal loan you will be left with less than a 5% deposit meaning that there are very limited options for banks that will lend to you.
My suggestion would be to sit down with a good mortgage broker who can explore all of the options for you and then you can make an informed decision on how you would like to proceed.
Please let me know if I can be of assistance
Q: What's the best way to approach my bank to try and obtain a better interest rate?
A: Hi Holly,
One way is to just visit a branch or call them up and ask them if that is the best deal they can offer you.
If you have a broker they should also be offering to review your mortgage on regular occasions. If you don't have a broker it may be worth looking into meeting with one. The benefit of having a broker review your mortgage over just asking your bank to reduce your rate is that a broker can look at more options available whereas a bank can only tell you what the best rate they can offer is.
Another benefit of a broker over going to the branch directly is that a good broker will apply for a discretionary discount which can sometimes be more than what a branch will offer as it requires a couple of extra steps to request the better rate.
Finally using a broker won’t cost you a cent.
If you have any questions feel free to give me a call on 0432 570 099
Q: Had a few credit issues… is there a minimum credit score you can have and still qualify for a home loan?
A: Hi Leigh,
It is not so much about the credit score but the issues that you have on your credit file.
There are a number of non conforming lenders that will lend money to people with credit issues, but you will pay more because of it. These lenders offer a rate for risk model which essentially means that they increase the rate the more risky you are because of things like credit issues. Depending on your credit issues your interest rate could be 11% or 12%.
They may also have higher deposit requirements or limits on the loan to value ratio you can borrow at.
It is not all bad news. These lenders often understand they are just a short term measure, once your credit history improves a good broker should be recommending you move over to a normal bank with a much better interest rate.
Feel free to get in touch if you want to discuss your specific situation, with credit issues each loan and rate is very different so the above is just general information.
Q: My partner and I are earning good money, 120k and 80k and pay $1,100 a week rent. We have found a property we like and want to ask if it is possible to borrow 100% of the property, about $820,00?
A: Hi Emily,
As a general rule there are not any banks that will lend 100% of the property value. Some banks will be looking for a minimum deposit of 5% plus the costs associated with the purchase (Lenders Mortgage Insurance, fees, charges, stamp duty etc).
If you are looking for a 100% loan, a security guarantor would help you achieve this.
A security guarantor offers some of the equity they hold in real estate as additional security for your loan allowing you to borrow at least 100% (in some cases you can borrow more to covers costs).
If you have any questions let me know.
Q: Hi - question about a home loan – how do you know if a mortgage broker if offering us the best loan… why just mention ANZ and Westpac, how long should we have to wait for approval?
A: To find out if a mortgage broker is offering you the best loan, the first thing I would be asking is WHY they are recommending that particular loan or bank and how that bank or loans meets the requirements you have discussed with them.
As for approval time frame it depends on the bank and how busy they currently are. Your broker should be able to give you a rough guide as to how long it should take for the approval to come through. In very general terms it can take anywhere from 24hrs to 4 or more weeks.
Q: What lenders cap LMI above 95% for Owner Occupier (NOT first home buyer), other than BoQ and Bankwest?
A: Hi Corina,
It depends on your particular situation. Liberty have a rate for risk model as they will lend to people who fall outside of the normal lending criteria.
Assuming you have perfect credit history, long term full time employment you would probably be looking at an interest rate of around 4.99% plus a minimum application fee of $995 plus a valuation fee of around $350.
All the above numbers are general numbers your specific situation will affect the interest rate and fees.
Another option to consider is Keystart, they will go up to 98% LVR, no LMI and they do not just cater for first home buyers.
Feel free to get in touch to discuss if you have any questions.
Q: What lenders cap LMI above 95% for Owner Occupier (NOT first home buyer), other than BoQ and Bankwest?
A: Liberty will also do 95% plus full LMI cap