Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
LMI-Free Home Loans: ANZ's Exclusive Offer for Ambitious Homebuyers
142 Plays4 months ago
In this episode of the Buying Your First Home Podcast, we're thrilled to introduce you to ANZ's groundbreaking Low Risk LMI Waiver. This isn't part of any government scheme, and you don't need to be a professional like a doctor or lawyer to qualify. This new policy could save you hundreds of thousands of dollars on your home purchase, so you definitely want to tune in!
We'll break down how ANZ's Low Risk LMI Waiver allows eligible borrowers to borrow up to 95% of a property's value without paying any Lender's Mortgage Insurance (LMI). Whether you're purchasing, refinancing, or investing in property, this waiver could be a game-changer. However, it targets higher income segments and specific high-value suburbs across Australia, and it's currently available through a limited number of brokers, including us.
We'll explain what LMI is, why it's typically required, and how this waiver can eliminate that cost. We'll also go over the eligibility criteria, including the need for a strong credit history and high income, as well as the restrictions on property types and locations. While this product isn't for everyone, it offers significant benefits for those who qualify, such as increased borrowing capacity and reduced deposit requirements.
Hear real-life examples of how much you can save with this waiver, and learn why it might be a smart move in the current market. We'll also discuss alternative options for those who don't meet the criteria, such as professional LMI waivers, guarantor loans, and other government schemes.
If you're interested in exploring these opportunities, contact us at HunterGalloway.com.au for a free assessment. We're here to help you every step of the way in your home buying journey. Don't miss this chance to unlock substantial savings and get into the market sooner. Tune in now!
Visit HunterGalloway.com.au for more information and personalized assistance. Let's take the first step towards unlocking the door to your new home!
Recommended
Transcript
Introduction to ANZ's Low-Risk LMI Waiver
00:00:00
Speaker
Today we're diving into something massively exciting, Ainset's brand new low risk LMI waiver. No, this has nothing to do with the government guarantee scheme. You don't need to be professional, a doctor, a lawyer. Absolutely not. It could save you literally hundreds of thousands of dollars on your home purchase. So you're going to want to stick around.
Guidance for First-Time Home Buyers in Australia
00:00:17
Speaker
Welcome to the Buying Your First Home Podcast, your personal guide through the Australian housing market. Here we tackle the big questions and the small details that come up when buying your first home. From financial prep to finding the right neighbourhood, we're here to ensure that you've got all the knowledge at your fingertips. So let's take the first step towards unlocking the door to your new home.
Eligibility and Limitations of ANZ's LMI Waiver
00:00:42
Speaker
ANZ's low-risk LMI waiver allows eligible borrowers to borrow up to 95% of a property's value without paying a dollar of LMI. This policy is crazy. It can be used for purchases, refinances, for a home to live in, for an investment property with both principal and interest and interest-only repayment options. Here's the thing though, it is targeting some higher income segments, which we're going to break down and it's restricted to some of Australia's more lucrative suburbs. Right now, it's not available online and only available for a limited amount of brokers, which we can
Understanding LMI and Its Costs
00:01:10
Speaker
help with. But um before I get too far, what exactly is lenders mortgage insurance? Lenders mortgage insurance is an insurance policy that's there to protect the bank in case you're unable to pay your loan back. It's there completely to protect the bank's interest. It doesn't help you as the individual consumer, but it's generally applicable in Australia if you're borrowing more than 80% of the property value.
00:01:27
Speaker
And the lender's mortgage insurance can be tens of thousands of dollars. So what you might be wondering, just get to the point, Jayden, am I eligible? Well, let's break down the requirements of ANZ's low risk LMI waiver. Well, firstly, the property has to be a standard residential property. It can't be commercial, it can't be self managed super, any specific assets, it needs to be a plain old home. The second criteria around this, it needs to be in one of 145 eligible suburbs. Now, these are all high value suburbs. Places like Rose Bay and Sydney, Turac and Melbourne and City Beach and Perth. There are also specific borrower criteria. Now, it's always subject to credit approval, but at a high level, then when you have a very strong credit history with no missed repayments or black marks on your file, they need to see a high level of uncommitted monthly income. In other words, you need to be earning more than enough money to cover your home loan and expenses comfortably for these repayments.
00:02:11
Speaker
And it's also subject to meeting ANZ serviceability and credit criteria.
Potential Savings and Increased Borrowing Capacity
00:02:15
Speaker
The big issue with this new waiver is there are some pretty lofty minimum loan amounts. The minimum loan amount eligible for this waiver is $2 million, dollars with the maximum amount depending on the postcode ranging from $4.75 million to $7.6 million. dollars And this is really the key concern with this new program. It's the minimum loan amount. A loan amount of $2 million dollars translates to a household income of about $450,000 or more. This excludes a pretty big proportion of first home buyers, particularly those in the lower to middle income brackets. All right, so we've established that this product isn't going to be great for everyone out there, but it will suit a section of people. So let's go through some of the benefits.
00:02:49
Speaker
The first one is obviously cost saving. Saving on lenders mortgage insurance can mean putting tens of thousands of dollars in your pocket. It also means you're going to increase borrowing capacity. You need to put less deposit down. You might need to put down a 5% deposit, reducing how much you need to save and potentially how much you might need to sell if you own shares and other options. Let's look through a real life example. Imagine you're buying a $2 million dollars home, normally you'd need a 20% deposit of $400,000 to avoid the lender's mortgage insurance. But with the low risk LMI premium, you'd only need 5% deposit or $100,000. Plus you'd avoid the lender's mortgage insurance
Market Benefits and Risks of ANZ's Waiver
00:03:20
Speaker
costs. For a $4 million dollars home, you'd normally need $800,000 to 20%. But with the waiver, you'll only need $200,000. You'd also avoid $136,000 in lender's mortgage insurance costs.
00:03:31
Speaker
Now these all sell out pretty crazy numbers, but the reality is in places like Sydney and Melbourne, getting into the market can cost that much. And the difficult thing in the current market is that movement in prices. Say you're aiming to get in the market in the next four years, he might save $65,000 per year over that time range you're if you're in a higher income bracket. In four years time based on the current property price growth, if you're aiming to get into $1.5 million dollars property today, it could be up to $2 million dollars in four years and you could miss the boat. The market could well have outgrown your expectations. And that's where this policy can be a good help. Your income and savings might not grow by that $500,000 over four years and this policy could help you get to the market a little bit sooner. Some other general examples of where this could be helpful are if you're looking at potentially refinancing or where you might have bought a home a couple of years ago, you might want to refinance and access previously, you know, debt equity that wasn't available to reinvest and build wealth faster. I've seen it fairly commonly in the tech space where you might not want to liquidate shares and don't want to use that deposit. Now, this scheme could be a great way of getting in the market without having to sell down your shares, paying capital gains and getting the upside today. I think with families wanting to upsize where bridging loans might not be available and it means you can get into the market before you have to sell your current family home to move straight from one home to the other. It can be particularly good for cash-backed individuals wanting to have a bit of a safety net of savings. You might want to just put the rest of your cash in the offset account and have it available. This can be a great product for that.
Alternatives to ANZ's Waiver for Ineligible Buyers
00:04:47
Speaker
Or if you're self-employed and you want to leave cash in your company instead of doing division 7-8 loans and different things, obviously speak to your accountant around this.
00:04:53
Speaker
but it can be good because it means you don't have to pull out your larger deposit. You still have the cash there, but you can get to the market without paying hundreds of thousand dollars in lenders mortgage insurance. Now obviously that's all the good, but there is some bad with this stuff. There are a number of drawbacks. To meet the minimum loan amount at 95%, the purchase price needs to be over 2.1 million dollars to get to the loan of 2 million dollars plus. So in Sydney for a lot of home buyers, you might be looking at 1.5 to 1.5 million dollars mark, this policy isn't going to be any help to you. The second issue with this is the policy's high credit standards. You might have strong income, you could be on 450, $500,000 a year, but if your credit score isn't high enough, you're not going to be eligible for this policy. Credit scores are data-driven assessments by credit bureaus that predict the likelihood of someone defaulting on their loan or not paying. A longer credit history with consistent responsible credit use typically leads to a higher score. So if you're a young person and only just been in the market, you might only have one credit card, you may not have had your credit file for long enough to have built up a high enough score to be eligible for the scheme. We can definitely check that out if you are interested in wanting to find out more info on this scheme. And so what happens if you aren't eligible, if you aren't one of the lucky people on 450, $500,000 a year looking to buy a $2 million dollars home in Sydney, in Melbourne, what is possible? Well, as I mentioned, there are professional lenders mortgage insurance waivers that don't need these huge income targets. If you're a doctor, an accountant, a lawyer,
00:06:05
Speaker
A nurse, in some cases, you are eligible to have the lender's mortgage insurance waived if you've got a 10% deposit, sometimes less if you're a doctor or specialist. Another way of getting the market with a low or no deposit is a guarantor loan. If you have a family member, you could use their property as additional security to help get in the market through the use of a guarantor loan. And there are other government schemes, as I mentioned, so hit us up if you want to know more info for that for a free assessment. And if you are ready to apply, what is the process? Well, the best thing is working with a mortgage broker like Hunter Galloway. We can help do the pre-work and make sure you're eligible for this specific product before you apply. We can see if there are any other products in the market and things you can be eligible for that you might not be otherwise
Exploring Mortgage Options with Hunter Galloway
00:06:39
Speaker
aware of. ANZ's low risk LMI waiver is complete game changer for eligible home buyers. And as I mentioned, if you're not eligible, there could be other strategies that could help you avoid lenders mortgage insurance altogether. If you're ready to explore these opportunities, contact us at huntergalloway dot.com.au. We're here to help you every step of the home buying journey. We're mortgage brokers who are based in Brisbane. We help people all around Australia. So if you want help or a free review, hit us up at huntergalloway.com.au. We'd love to help you out. And until next time, we'll see you guys.