Pay your LMI premium in monthly installments over time, rather than as a down payment or capitalizing on your home loan. The LMI premium is a single, non-refundable fee that is paid at the time the loan is liquidated. For most lenders, the LMI fee can be included in the loan amount. If the LMI is added to the amount of the mortgage loan, the borrower will pay interest on the total loan and increase the minimum monthly repayments on the loan.
The LMI provider charges us for the LMI as a one-time cost. We transfer this cost to you as an LMI fee and nothing more. The LMI fee is generally added to the amount you borrow and is paid at the time of withdrawal. In some cases, you may be able to pay this amount in advance with your own funds; contact us for more information.
No, the LMI is a non-refundable payment that is made for each loan. If you refinance and your LVR is greater than 80%, the LMI will be repaid in the total amount calculated on the amount of the loan at the time of the application. If you want to refinance with another lender, you may have to repay the LMI with your new lender if you don't meet your minimum deposit requirements. Not all lenders use both mortgage insurance providers, so depending on the lender you choose, the LMI may be calculated slightly differently.
The LMI is required when the borrower has a deposit of less than 20% and the loan-to-value ratio (LVR) of the loan is greater than 80%. The cost of the LMI depends on several factors, including the amount of your mortgage loan, the value of the property you're buying, and the type of loan you're getting. This means that if you have problems with your reimbursements, you won't be able to file an LMI policy claim on your behalf. Even if your loan-to-value ratio (LVR) is higher than 80%, you could be exempt from your LMI if you meet some specific conditions.
This video, which answers some of the most frequently asked questions about LMI, is a great way for lenders to understand the basics of mortgage insurance. Basically, the LMI is a policy or tool that allows the lender to apply for a riskier loan with a smaller deposit and a higher LVR, which ensures that they won't have to pay out of pocket if the house cannot be sold to cover the loan. The LMI is calculated based on the amount of the loan and will vary depending on the loan-to-value ratio (LVR). Alternatively, if your deposit is less than 20% but you have a guarantor of the real estate loan, you may be able to avoid paying the LMI.
A guarantor means that you can still borrow the same amount with the same (or a smaller one) deposit and you won't have to pay any LMI. Basically, the higher the loan amount and the more you borrow against collateral, the higher the LMI you'll have to pay. This means that instead of paying thousands of dollars up front and out of pocket, the lender will add the LMI to the principal of your loan and you will pay it off during the term of the loan. Lender's mortgage insurance (LMI) is insurance that a lender takes out to insure against the risk of not recovering the outstanding balance of the loan.
However, for certain professions, up to 90% can be exempted from the LMI for LVRs and is evaluated on an individual basis.