08/10/2023
🏡 The mortgage industry is a fascinating realm with its own unique language. Ever heard of 'LVR'? It's short for 'Loan to Value Ratio,' and here's the scoop.
💰 When your Mortgage Broker is figuring out how much you can borrow, the deposit size you'll need, and your eligibility for different mortgage options, the LVR plays a crucial role.
📊 In simple terms, the LVR represents the percentage of the property's value (as determined by the lender) that your loan equals.
💡 Important to note: A property's value isn't necessarily the price you're paying; it's what the lender values it at, which might differ from your purchase price.
🧮 Wondering how to calculate the LVR? Let's break it down:
Property value: $700,000
Loan needed: $560,000
LVR: 80%
Or, if you need to borrow $630,000, your LVR would be 90%.
🤔 Why does the LVR matter? Because different lenders and loan types have varying maximum LVRs. Some lenders may only approve certain LVRs for small properties or specific locations.
🏦 Most lenders typically finance up to 80% LVR, and you can go higher with Lenders Mortgage Insurance (LMI). However, low documentation loans might be limited to 60% LVR without LMI.
💼 Lean on the expertise of your Mortgage Broker:
When applying for a loan, your Mortgage Broker's first task is valuing the property you want to buy. This helps you understand where you stand and whether LMI is required.
📞 Have questions or need assistance with property purchase? Call us at 0421809229 or get in touch with one of our brokers. You can also shoot us an email, telling us about yourself and your needs.
