Essential Guidelines for Obtaining 95% LVR Mortgage Loans

The Australian finance industry is experiencing a reemergence of 95% LVR (Loan to Value Ratio) mortgage loans with tighter lending conditions. 95% LVR mortgage loans mean that you can borrow up to 95 % of the market value of the security property.

Lenders carefully judge you for the Loan

If you are considering applying for a 95% LVR mortgage loan, it is extremely important that you put forward an impeccable loan application to the lenders/credit providers. There are a number of common reasons that can reject your loan application, such as:

>> Having numerous credit checks performed on borrower's credit files

>> Having defaults registered against their name

>> Having high credit card debts or personal loan debts, etc.

>> Having recently changed jobs and still being on probation, or

>> Having recently changed industries

Useful Tips to Help You with Your 95% LVR Home Loan Application

Deciding to purchase a property and then trying to apply for a 95% LVR home loan will be one of the most difficult and most costly financial decisions you will make in your life. You will need to carefully consider a number of factors, such as:

>> Are you looking to buy a house, villa, unit or vacant land?

>> What area are you considering for purchasing your property?

>> What amount are you willing to pay for the property?

>> Do you have enough funds available to cover stamp duty, legal fees and other related costs (e.g. removal costs)?

>> Will the property give you a good capital gain over time?

>> Is there suitable infrastructure nearby (e.g. schools, transport, shops, etc.)?

You will also need to consider a number of additional factors, such as:

>> A minimum of 5% of the purchase price of the property in Genuine Savings (i.e. not a Gift from a family member), but a genuine demonstration of your ability to save.

>> Keep all your monthly payments up to date (e.g. your mobile phone bill, electricity bill, car payments and credit cards)

>> You need to be aware that Lenders Mortgage Insurance (LMI) premiums will increase if you borrow more than 90% of the market value of the property

>> Some lenders will allow you to capitalise up to 2% of the market value of the property for Lenders Mortgage Insurance (LMI) and which they will add to the loan amount

Obtaining the right home loan package is a time-consuming process. So, it is always advisable to employ the services of a finance expert. He/she will help you in calculating your borrowing limit, interest rate and monthly repayment amount. You can contact a reputed finance brokerage firm and take help of its home loan experts. Make sure that the firm is aware of the standard requirements for obtaining 95% LVR mortgage loan.

So, next time you apply for a home loan package, follow the tips and suggestions mentioned in this finance guide. It will make 95% LVR home loans a reality for you.

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