How Much Can You Borrow?
By Sam White, Executive Chairman
Over the course of the last 12-18 months there have been many changes to lending criteria, so it can be quite confusing trying to confirm how much you can borrow as a percentage of the property price (known as the LVR the Loan to Value Ratio).
As you are probably aware, 100 per cent loans have been removed from the market, and many lenders have introduced a requirement to show genuine savings before they will consider financing a property purchase. Lenders may also have differing rules depending on whether or not you are an existing customer, and also the level of savings you can demonstrate.
It's worth noting, particularly if you feel these changes mean that you are not in a position to purchase at the moment, that while LVR rules have changed, there is still a solution for most borrowers.
Some of the options still available that you may be able to access include 95 and 90 per cent loans, both with and without LMI capitalised into the loan, and also with or without proof of genuine savings. Another option you may wish to consider is the use of family equity.
Achieving finance approval is reliant on sourcing expert assistance from a professional mortgage broker, who will not only know the differing rules of a range of lenders but also how to match you to the right lender for your particular situation.
And if you don't currently qualify for a loan, Loan Market can work with you to implement a savings plan or finance restructure to get you into a better position to borrow in the short to medium term, something that may take less time than you imagine.