The Loan to Valuation Ratio (LVR) is the lenders way of working out the true financial value of your property, and decides whether your Home Loan needs to be covered by Lenders Mortgage Insurance.
The Loan to Valuation Ratio is simply the loan amount divided by the value of your property. The lender requires the borrower to have Lenders Mortgage Insurance if they lend you more than 80% of the value of the property.
For example, the LVR of a $640,000 loan on a $800,000 property is 80%. In this instance, no Lenders Mortgage Insurance is required.
If the LVR is over 80%, then Lenders Mortgage Insurance will apply and this can be added to the base loan amount.
You must take into account that the value of a property is determined by the lender’s valuation and NOT the price you paid for it. There may a difference between the valuer’s price and the purchase price.
We can negotiate with the bank a good interest rate depending on the LVR. Most banks will offer a rate for risk interest rate which means the higher the LVR, then higher the rate. However, some banks don’t do this so it is very important for us to help you because we know which banks don’t do this so that we can give you good advice and choice, especially for first home buyers (link to tab on main menu). We are very experienced with this type of lending and we will be able to guide and help you. If you are a first home buyer come to our info sessions.
Specialist mortgage broker Sue will guide you to find a solution to purchase a property Excited? You should be Come and find out how Sue helped others who never thought they would own a property
