95% Loans .. an update

This is an area of lending that changed markedly in 2016 and it impacts on how much money you need to buy your home.

95% loans are all about the treatment of Mortgage Insurance. (A one off premium to protect the lender’s position, approximately 3%)

1. There used to be lenders who would allow you to add some or all of the mortgage insurance premium to the loan – there is now only one left in this space (with an interest rate so appalling we don’t want to use it)

2. Lenders now require YOU to pay all the mortgage insurance from your money – so their loans are still 95%

*Costs vary from state to state – but let’s look at a $500k purchase in Qld where a first home buyer pays no stamp duty; Costs will then be approx. $2,500 and are inclusive of things like Solicitor, settlement and government fees. (I can explain these all in more detail, for your particular circumstance if you “Ask Alan”)

So to put it into a monetary perspective (for our $500k Qld purchase);

You need $25,000 + $2,500 + $15,000 = $42,500

This is quite a hurdle for First Home Buyers in particular and because so much has changed in this space recently, it is not something to take advice from friends or family on based on their own experiences.

It is now more important to juggle what must be saved and what can be gifted. This is where I can help you most

Why not Ask Alan – it’s what I’m here for