85% LVR No LMI Home Loans
Purchasing a property in Australia as an expat or foreign buyer can be a thrilling venture. However, the process of navigating the mortgage market from overseas can seem overwhelming.
When it comes to purchasing a home, the down payment can be a significant hurdle for many prospective buyers. Traditionally, borrowers are required to pay Lenders Mortgage Insurance (LMI) if their Loan-to-Value Ratio (LVR) exceeds 80%. However, there is an alternative option gaining popularity in the market – the 85% LVR No LMI home loan.
In this article, we will delve into the world of 85% LVR No LMI home loans, exploring the benefits, eligibility criteria, and considerations for potential borrowers.
Understanding 85% LVR no LMI home loans
An 85% LVR No LMI home loan is a mortgage that allows borrowers to finance up to 85% of the property’s value without requiring LMI. This means that borrowers can avoid the additional cost of LMI even if their LVR reaches 85%.
This financing option provides a viable alternative for those who struggle to accumulate a larger deposit while still offering the benefits of a higher borrowing capacity.
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Benefits of 85% LVR No LMI home loans
Cost savings
One of the primary benefits of an 85% LVR No LMI home loan is the cost savings it offers. LMI premiums can add a significant amount to the overall cost of a mortgage, sometimes amounting to thousands of dollars.
By eliminating the need for LMI, borrowers can save money and reduce their upfront expenses. These savings can be directed towards other homeownership expenses or be kept as additional funds for future use.
Increased borrowing capacity
Another advantage of this type of loan is the increased borrowing capacity it provides. With the ability to finance up to 85% of the property’s value, borrowers have access to a higher loan amount. This can be particularly beneficial for first-time homebuyers who may find it challenging to save a larger deposit.
The higher borrowing capacity opens up more options in the housing market, allowing borrowers to consider properties that may have been out of their reach with a lower LVR.
Expedited loan approval process
An 85% LVR No LMI home loan can also expedite the loan approval process. Since LMI is typically associated with additional paperwork and approvals, removing the LMI requirement streamlines the process.
Borrowers can expect quicker turnaround times and a more efficient application process. With the reduced administrative burden, borrowers can move forward with their home purchase plans without unnecessary delays.
85% LVR no LMI home loan requirements
Lender requirements
Each lender may have specific eligibility criteria that borrowers must meet. These requirements typically include credit history, income verification, and employment stability. Lenders may also have restrictions on the type and location of the property they finance. It is essential to research and compare different lenders to find the one that aligns with your financial situation and goals.
Loan structure and interest rates
It’s essential to compare interest rates and loan terms across different lenders offering 85% LVR No LMI home loans. While these loans can be advantageous, the interest rates and fees associated with them may vary from lender to lender.
Conduct thorough research to ensure you secure a competitive loan that suits your long-term financial goals. Additionally, consider factors such as fixed-rate or variable-rate options, as well as the loan term, to find the most suitable loan structure for your needs.
Deposit and equity
To qualify for an 85% LVR No LMI home loan, borrowers must have a minimum deposit or equity of 15% of the property’s value. This equity can come from savings or existing property ownership.
It’s crucial to evaluate your financial situation and determine if you have the necessary deposit or equity before pursuing this financing option. If you fall short of the required amount, you may need to explore strategies to increase your deposit, such as saving more or leveraging existing assets.
Market research and lender options
Conducting market research and seeking advice from mortgage brokers or loan officers is crucial when considering an 85% LVR No LMI home loan. They can provide guidance, help you understand the specific loan products available, and assist in identifying lenders who specialize in this type of financing.
It’s important to work with professionals who have experience in this area to navigate the complex landscape of home loans effectively.
Speak to Odin Mortgage
The 85% LVR No LMI home loan presents an enticing option for prospective homebuyers seeking to overcome the financial barrier of a high LVR. By avoiding the additional costs associated with Lenders Mortgage Insurance (LMI), borrowers can save money and access a higher borrowing capacity.
However, it’s essential to consider eligibility criteria, lender requirements, and the overall structure of the loan.
Ultimately, an 85% LVR No LMI home loan can unlock opportunities, allowing you to step closer to homeownership without the burden of additional insurance costs.
Remember, choosing the right mortgage brokerage company is pivotal in this process. Reach out to our expert team at Odin Mortgage to receive personalized guidance tailored to your unique circumstances.
Don’t let distance or unfamiliarity deter you – take the first step towards your Australian property ownership journey today.
Get a free Australian mortgage assessment today.
Frequently asked questions
Can I secure an 85% LVR No LMI home loan if I have bad credit?
While having bad credit can pose challenges, it doesn’t necessarily disqualify you from securing an 85% LVR No LMI home loan. The lending criteria may vary between lenders, and some may be more accommodating than others. It’s advisable to consult with an experienced mortgage broker who can assess your situation and guide you towards suitable lenders who consider applicants with bad credit.
What are the disadvantages of 85% LVR No LMI home loans?
While 85% LVR No LMI home loans offer several advantages, it’s essential to be aware of potential disadvantages. These may include slightly higher interest rates, stricter eligibility criteria, and limited access to certain loan features. It’s crucial to weigh the pros and cons based on your individual circumstances and financial goals.
Are there any restrictions on the type of property I can purchase?
Generally, there aren’t specific restrictions on the type of property you can purchase with an 85% LVR No LMI home loan. However, it’s essential to conduct thorough research and consider factors such as property location, zoning regulations, and market demand. Some lenders may have specific guidelines for certain property types, such as apartments or rural properties.
Can I refinance my existing home loan to an 85% LVR No LMI loan?
Yes, it’s possible to refinance your existing home loan to an 85% LVR No LMI loan, subject to meeting the eligibility criteria of the new loan. Refinancing can be a smart financial move if it helps you secure more favorable terms, lower interest rates, or eliminate the need for Lenders Mortgage Insurance.
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