What Is 100% LVR Mortgage Approval from My Mortgage Provider?
100% LVR mortgage approval from your mortgage provider means you have been approved to borrow 100% of your property’s current value. LVR stands for loan-to-value ratio and is used to describe the number of funds an applicant needs to borrow to purchase a property. LVR is calculated as a percentage of the property’s valuation determined by a lender.
Generally, LVR with a percentage higher than 80% is seen as risky by lenders and requires a borrower to pay for Lender’s Mortgage Insurance. Low LVR percentages allow a property’s worth to equal a higher value than the home loan amount. Low LVR is seen as safe to lenders because, in the chance of repossession, they are more likely to get the total loan amount back. This is why Lender’s Mortgage Insurance is required for borrowers with LVR higher than 80% because the lender will need additional protection.
High LVR percentages can leave a home loan policyholder paying higher mortgage repayments. Potential borrowers can avoid high LVR percentages by saving to pay a larger deposit. Low LVR percentages can allow a borrower to increase their borrowing capacity, maintain low rates, and pay less on their monthly mortgage repayments.
Potential borrowers can reach out to our professional lending specialists at Mortgage House for financial planning and budgeting assistance to increase their chances of receiving a low LVR. You can take a look at our free Budget Planner Calculator and receive personalized recommendations to help meet your financial goals.