Many people working in the oil and gas sector are unaware of a “hidden’’ benefit of PESA membership that can save them thousands of dollars, reports Christina Granger.
Some major lenders offer a waiver of lenders mortgage insurance (LMI) to PESA members, which can equate to a benefit of many thousands of dollars.
LMI must be paid by most people who borrow more than 80% of the value of a property, whether that is a owner-occupied home or an investment property.
With median house prices in Australia now above $600,000 – and about $1 million in Sydney – this means having a deposit of as least $120,000 ($200,000 in the Harbour City) to avoid paying LMI.
The LMI cost will vary depending on the loan to value ratio (LVR), the lender and the insurance provider, but it is generally 2.5-3 per cent of the amount being borrowed.
Most people want to buy a home sooner rather than later, but saving the typical 20% deposit required by most lenders can be difficult.
LMI is one of the most popular ways to achieve the dream of home ownership sooner for borrowers who don’t have a large deposit.
It also has to be paid by investors who want to snap up a rental property.
It is either paid upfront or capitalised into the loan, which means payments can be made over the life of the loan.
This means PESA members can easily save more than $30,000 on LMI.
Former PESA WA president Nathan Ceglar said it was a “hidden” benefit for PESA members because most members did not know about it.
Mr Ceglar wasn’t aware of it himself until a colleague found out about it through her mortgage broker.
“Some companies will pay for one professional society membership for their employees. So for those considering buying their first home, I think that this member benefit would tip the scale towards PESA membership when considering all the options out there,” Mr Ceglar said.
Melinda Wallwork said she and her partner recently approached Mortgage Choice to assist them in remortgaging their property.
“We are both geologists and are members of PESA, however were unaware that PESA members were eligible for the LMI waiver,” Ms Wallwork said.
“Our mortgage broker Jo informed us of this great opportunity, and the LMI amount we saved was around $30,000.”
Jo Patterson, finance broker at Mortgage Choice in Mandurah, has helped several PESA members who did not know about the benefit until they consulted her.
She said some lenders had certain policies in place that offered professionals who work in specialised industries, such as the mining, energy and resources sector, the ability to obtain finance up to 90% loan to value ratio (LVR), without paying LMI,” she said.
“Under the policy guidelines, applicants need to meet certain criteria, such as being an active member of PESA, to be eligible for finance.
“However, a customer may be unaware of this fact, which is why it is so important for them to deal with a professional mortgage broker who understands the intricacies of each financial institution’s lending policies.”
Ms Patterson said some of her clients were able to secure loans up to 90% LVR and avoid paying LMI.
“With Melinda, for example, this was a fact she was completely unaware of before speaking to me,” Ms Patterson said.
“And had she gone directly to her bank before speaking to me, she may have ended up paying $30,000 LMI on top of her loan.”
Ms Patterson said Mortgage Choice offered the benefit of being able to conveniently compare loans from more than 20 lenders.
“Many workers are FIFO or professionals who just don’t have the time to go into a bank between the typical 9am-5pm weekdays,” she said.
“We can do everything by phone, email or Skype at anytime, including after hours when they’re back in the crib or at home. We come to people’s homes and I’ve even met people at the airport while they’re waiting around for their flight back to site.”
PESA benefit that saves home buyers a small fortune
Posted by | 27/02/2017
