An owner-occupied loan is a loan secured by a dwelling which is occupied by the borrower as his or her primary residence.

Those wanting to take out an owner-occupied home loan may wish to purchase an existing home, build a brand-new property (land & construction), or renovate an established property. Sometimes a homeowner might choose to refinance his or her home loan with the intention of using the money to purchase a second home or an investment property or to consolidate existing debt.

According to the owner-occupancy clause, the home you occupy should be your primary residence. If you wish to leave the property, you need to notify the lender before leaving your residence. If you plan to rent it to tenants, it is considered an investment property and consequently, your loan must be refinanced to reflect the change. It will, however, impact the loan conditions and interest rate etc.

If you are buying your first home, then you may be eligible for First Homeowners’ grant. These cash grants are offered by every state and territory government to buyers who have never purchased a home before. There are also some stamp duty discounts or exemptions for First Homeowners, which can save you a lot of money.

When you apply for a home loan to purchase a house, you will need to provide information about the value of the asset, your income, and liabilities such as existing debt. Lenders will evaluate these details and other considerations, including credit history, for the amount you intend to borrow and the type of loan you are looking to obtain

For owner-occupied property, you can borrow up to 95% inclusive of Lender’s Mortgage Insurance (LMI). There are a few banks that can lend up to 98% inclusive LMI, but the higher interest rate will apply. Generally, the amount you can borrow without LMI is 80% of the value of the secured dwelling. Hence, you need to have funds available to cover the balance 20% of the purchase price plus other associated costs.

Genuine savings are essential as most lenders will check whether you can save consistently and will usually require your last three to six months saving history before considering you for a loan.

At Viable Finance, we want to assist you in purchasing your owner-occupied home. We will discuss your idea and then review your financial situation. We then prepare all the paperwork required by the selected lender to obtain fast approval of your home loan. We look forward to speaking with you.