How to obtain a 95% LVR Mortgage Loan

The Australian finance industry is experiencing re-emergence of 95% LVR mortgage loan with tighter lending conditions. A 95% LVR mortgage loan mean that you can borrow up to 95 % of the market value of the security property.

Lenders/Credit Providers carefully judge you for the 95% LVR Loan

If you are considering applying for a Prime Home Loan with a 95% LVR, 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) and have a high credit score
  • 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

What Options do I have if I can not meet the above criteria?

If you can not meet the lending criteria of a Prime Home Loan you may have options to 95% LVR with a Near Prime Home Loan.

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.