Case Studies

Borrowing 85% of the property value with no Lenders Mortgage Insurance

Jane is a busy single mother who juggles working shifts as a paramedic with her ongoing child raising responsibilities.

Jane has funds available to her of approximately $70,000, which she has carefully accrued to use as deposit to buy established 2-bedroom apartment, in the same area where she has rented for several years.

The property Jane found was offered for sale by auction, and Jane was the successful purchaser, with a final bid of $453,000. Joan thought she was now set for a good future and was happy to also learn that she

would not have to pay any stamp duty on her purchase due to the Victorian Government abolishing stamp duty for home buyers spending less than $600,000 on their first home.

A local bank approved Jane’s loan request for a loan of 85% of the property value, based on her deposit of approximately 15%, but requested that Jane separately pay $4300 to cover the cost of Lenders Mortgage Insurance.

As Jane had to pay Lenders Mortgage Insurance of $4,300 before getting access to the settlement amount she required and had limited additional borrowing capacity, she asked if the bank could capitalise the mortgage insurance into the loan. The bank declined, and Jane was forced to look elsewhere, to find the funds she needed.

As most banks require mortgage insurance where the loan to value ratio exceeds 80%, and as most also won’t capitalise mortgage insurance premiums, Jane was caught between a rock and a hard place.

Friends who heard of her predicament, recommended Oz Lend as a mortgage broker experiences in resolving such situations. With the help of Oz Lend, Jane was able to obtain her 85% loan without having to take out Lenders Mortgage Insurance and had the funds available to her, just in time to meet her settlement obligations.

Jane was very grateful to Oz Lend, as her stress levels were off the scale as her settlement date loomed, and it looked like she would not be able to fully fund her purchase.

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