How to get no LMI and 90% LVR

By 18 May 2017Education
no lmi and 90%

Instead of paying monthly for a rental, Australians are looking towards buying, as it allows them to take one step at a time toward owning a property. More and more working professionals are applying for home loans, including:

  • Medical doctors
  • Accountants
  • Dental surgeons
  • Chiropractor
  • Veterinarian
  • Pharmacist
  • Optometrist
  • Entertainment professionals
  • Professional athletes
  • Engineers, or
  • Lawyer

The mortgage market is continually evolving and as a result, different lenders have introduced different products in the market to offer better deals to borrowers, especially for working professionals. Banks have divided these professionals into various categories according to the level of risk they represent. People with stable income streams are considered less risk compared to those with an unstable income pattern. For example, medical practitioners are known to carry the lowest risk compared to other professions, whereas, builders and developers are considered high risk borrowers.

Why do Banks Choose Only Certain Professions?

Banks and other lenders maintain a list of accepted professionals who obtain a waiver towards lender’s mortgage insurance, higher interest rates and higher loan limits.

They maintain this list because such professionals:

  • Make regular repayments without causing any delay
  • Borrow high loan value as compared to other borrowers
  • Almost never default on their loan

Getting 90 Percent Loan-to-Value Ratio with No Lender’s Mortgage Insurance

It is not easy to manage a home loan if you do not have a stable income. High-risk borrowers have to bear the burden of heavy cost like lender’s mortgage insurance (LMI). In addition to that, they are unable to retain high loan-to-value ratio (LVR). However, if you fall into the category of a low-risk borrower, you can qualify for the policy of 90 percent LVR without LMI. Borrowers, such as medical practitioners, engineers, or accountants usually qualify for this deal. Moreover, they also get a blanket approval for a home loan.

What is 90 Percent LVR with No LMI?

LMI is basically a fee borrowers need to pay if their deposit is lower than 20 percent of the property’s purchase price. Therefore, getting a home loan at 90 percent LVR with no LMI means you are only required to have a deposit equivalent to 10 percent of the purchase price with no obligation to pay the LMI.

  • Qualification Criteria – The criteria to be eligible for a policy of 90 percent LVR without LMI is quite simple. All you have to do is prove you can afford to pay back the loan amount. There are some lenders who offer you this deal even if you got a job just recently or started your own setup six months ago.
  • Maximum Amount Allowed – With 90 percent LVR and no LMI, there are maximum loan amounts. Speak to Hunter Galloway about these maximums.
  • Interest Rates – Most banks do not allow any discounts if they are not following a normal lending procedure. However, you should always consult a broker whenever you apply for a home loan and look for such offers. With wide market exposure, brokers can help you find a lender who offers competitive pricing and good discounts on the standard variable interest rates.
  • Cost Involved – The cost involved in getting 90 percent LVR without LMI is the same as it is for a regular loan. Lenders can also waive off some of the fees. Chat to Hunter Galloway who are able to assist you in finding the right lender.

Furthermore, you can also do the following with 90 percent LVR and no LMI if you are a registered medical doctor, engineer, accountant, legal advisor, and a dentist:

  • Purchase a new property
  • Refinancing
  • Getting access to equity

There are only a few lenders who can provide flexibility around this policy. If you have any of the above mentioned professions, chat to our team of mortgage brokers about the best deal possible for you.

Call Hunter Galloway on 1300 088 065 or email Joshua at Joshua.Vecchio@HunterGalloway.com.au