Considerations to Get a 90% LVR Home Loan Without LMI
1. Understanding 90% LVR Home Loans
LVR, which stands for “Loan-to-Value Ratio,” is the amount of the property’s value that you are borrowing. In this case, your LVR is 90% if you borrow $450,000 to buy a house worth $500,000.
Most lenders require LMI if the LVR exceeds 80% because it protects them from default risk. In some cases, LMI can add up to tens of thousands of dollars to the vehicle’s price. A finance broker in Melbourne can help you find lenders that don’t charge LMI or provide ways to avoid it, which can save you a significant amount of money.
2. Who Can Qualify for a 90% LVR Loan Without LMI?
A 90% LVR loan without LMI is not something that everyone can get. Lenders usually decide if you qualify based on:
- Income and employment stability: Full-time employment or consistent business income is usually required.
- Credit history: Your chances are better if your credit report is clean.
- Property type: People would rather live in a well-known house than an apartment or an unusual property.
- Deposit source: Some lenders permit gifts, grants, or savings to be used as deposits.
By working with home loan brokers in Melbourne, you can identify lenders willing to offer high LVR loans under these conditions. Brokers have access to niche lenders that the general public may not be aware of.
3. Government Schemes That Help You Avoid LMI
a) First Home Loan Deposit Scheme (FHLDS)
The FHLDS allows eligible first-home buyers to purchase a property with a deposit as low as 5%, without paying LMI. The government guarantees up to 15% of the property value.b) Family Home Guarantee
This program helps single parents buy a home with a deposit as low as 2%, also without LMI.c) Regional Home Guarantee
Supports eligible buyers in regional areas with low deposit options and no LMI.An experienced Melbourne mortgage broker can determine which scheme applies to you and guide you through the application process, making the journey smooth and stress-free.
4. Using a Guarantor to Avoid LMI
A common method to access a 90% LVR loan without paying LMI is by using a guarantor, typically a family member. The guarantor offers a portion of their property as security, reducing the lender’s risk.
Benefits of a guarantor:
- Avoid paying LMI fees
- Access higher LVR loans
- Borrow more without extra costs
Important: A guarantor must understand the risks, as their property is partially used as security. Local home loan brokers in Melbourne can explain these risks and guide both parties through the process safely.
5. Structuring Your Loan to Minimise LMI
- Split loans: Part of the loan at 80% LVR and the remainder as a smaller portion.
- Offset accounts: Reduce interest by keeping savings linked to your home loan.
- High-income borrowers: Some lenders allow high-income applicants to access high LVR loans without LMI.
6. Benefits of Using Home Loan Brokers in Melbourne
- Access to more lenders: Brokers have relationships with both major and boutique lenders.
- Time savings: They handle paperwork, applications, and follow-ups.
- Expert guidance: Brokers analyse your financial situation and suggest the best strategy.
- Better negotiation: Experienced brokers can negotiate more favorable rates and terms with lenders.
7. Steps to Secure a 90% LVR Loan Without LMI
- Assess your financial situation: Understand your income, expenses, and credit history to gain a clear understanding of your financial situation.
- Speak to a broker: Choose an experienced home loan broker in Melbourne to explore options.
- Consider government schemes or a guarantor: Identify if you qualify for FHLDS or need a guarantor.
- Compare lenders and loan structures: Evaluate which lenders offer high LVR loans without LMI.
- Submit your application: Your broker will manage the documents and liaise with the lender on your behalf.
- Approval and settlement: Once approved, your broker ensures a smooth settlement process.
8. Things to Keep in Mind
While 90% LVR loans without LMI are possible, there are important considerations:
- Higher LVR means slightly higher risk for you, repayments are larger relative to your deposit.
- Using a guarantor affects someone else’s property; a full understanding of the obligations is crucial.
- Not all lenders offer these options, choosing the right lender is essential.
A local home loan broker in Melbourne can assess all risks and benefits before you commit, giving you confidence in your decisions.
Ready to buy your dream home with a minimal deposit and no LMI? Speak to LTE Loans Australia, your trusted home loan brokers in Melbourne, today. We’ll assess your situation, explore government schemes, and connect you with lenders offering high LVR options. Our team of experts will guide you step by step, ensuring you secure the best mortgage solution to make your homeownership goals a reality. Contact us now and start your journey home.
