The Australian property market is seeing high demand in recent times with many buyers purchasing properties as part of their long term investment portfolio. In April 2017, it was reported that the median house price in Sydney hit $1.15 million. With rising prices and high demand, it is important to strike the iron while is hot. Recent tightening of governance has forced stricter lending criteria by banks, in particular lenders consider all loans over 80% of the purchase price to be a high risk. This view has made it harder to get approval to purchase a property. Yet your options are not limited as there is still a number of lenders who are offering loans for 95% of the purchase price. Find out how you can get approved for a 95% home loan for a property value of $1,000,000. Contact Marco Scannone at Stars Broking Services today on 0405 252 808.
Compared to other home loans, the 95% loan is harder to gain approval due to the increased risk imposed to the lender. Getting approval for this type of home loan is achievable yet it is important you meet the lender’s criteria.
Do you fit the right borrower profile to get approved for a 95% loan?
Lenders are looking for:
- Clear credit history – Your credit file must be squeaky clean, meaning all payments for credit cards, bills, personal debts must be made on time for the last 6 months
- Stable employment – You must be in your current job for 6 to 12 months
- Genuine Savings – All loans require you to prove you have saved 5% of the purchase price. However if this is not the case, other options include 95% no savings loan or a 110% guarantor home loan
- Minimal debts – Limited credit cards and personal debts. Those who have 5% of the purchase price in secured debts are often not approved
- Reasonable asset position – Lenders want to ensure you have a good asset position in relation to your age and income
- Location/ property type – The location and type of your property will influence the approval decision. Lenders are hesitant to approve loans for high rise units in the CBD and smaller town houses.
These are just some of the criteria in which lenders are looking for. Contact Marco Scannone today to find out if you meet this criteria to be approved for a 95% home loan.
Can I borrow more than $1,000,000?
Many lenders will only approve a 95% mortgage up to $800,000. However, with Sydney’s rising property price and the median reaching $1.15 million, purchasing an $800,000 property is nearly impossible. Some less conservative lenders will allow you to borrow up to $1,000,000, due to restrictions imposed by the lenders mortgage insurers. However, it has been reported in some cases lenders reaching a special agreement with their insurer and can consider a 95% loan up to $2,500,000 for those in an exceptionally strong financial position.