LMI sucks ... but there is a solution!!

First Home Guarantee for Kiwis!

Buying a home in Australia can be a daunting prospect. There are many factors, forms, rules and costs (this is where having a good mortgage broker really pays dividends).

A cost that catches many people by surprise is the dastardly Lenders Mortgage Insurance (LMI).

LMI is levied on borrowers when they are borrowing more than 80% of the value of the property. The cost of LMI can be punchy … I’ve seen LMI quotes over $30,000, it’s crazy.

Some professions can qualify for an LMI waiver, eg. lawyer, doctor, accountant, reg nurse.

For those borrowers that don’t qualify for a waiver, there is the option of the First Home Guarantee (FHG).

The FHG is a Government Guarantee that covers up to 15% of the home value. If it all turns to custard, then the Federal Government will step in and cover any shortfall in sale proceeds to cover the repayment of the home loan (up to 15% of the initial home value).

The FHG is free and it’s available to NZ citizens! (on cat 444 visas). There are 35,000 places available annually.

So, what do you need to be able to qualify for an FHG??

1. Min 5% deposit from “genuine savings”

2. Income up to $125,000/yr for individuals, or $200,000/yr for couples (based on previous year Notice of Assessment)

3. Purchase price up to the price cap for your state (eg. big towns in QLD is up to $700,000)

4. Kiwis need to provide a current VEVO

5. You have not held in interest in Australian property in the past 10 years

The FHG is a great way to save potentially 10’s of 1,000’s and you get better rates from lenders.

You must apply for your loan and the FHG with a participating FHG lender (not all banks participate in the scheme).

The best way to take advantage of the FHG is via your broker. I know a guy - CALL HIM!!

https://www.unohomeloans.com.au/brokers/paul-davey