Mortgage Insurance

I agree, you are very dumb.

 

It's called LMI. Mortgage Lenders Insurance.

Standard industry practice for our major banks, for loans for owner occupied security (residential homes) is that LMI is required for LVRs (Lending Valuation Ratios) in excess of 80% LVR. It is very expensive and not to be confused with borrowers person income protection. The definition you have provided is spot on. As you have pointed out, it is for the Lenders protection, paid for by the Borrower.

It is not so much a lender requirement, more the requirement of APRA (Australian Prudential Regulatory Authority). It is APRA who stipulates to the banks what "Risk" their lending book is to be at.

From APRA's website "The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the Australian financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding $4.9 trillion in assets for Australian depositors, policyholders and superannuation fund members."

 

If we are talking about a first home buyer, it is to assist Borrowers to have a proper saved deposit and to stop people overcommitting.

A Borrower can still borrow 100% of the purchase price using other Real Property security as collateral.

Send them to Rob. He was a great Broker by all accounts.

 

Next time try the Bank of Roland!

 

Reminds me of the CCR (Creedence Clearwater Revival) song. "Fortunate Son".

But,is he grateful?

 

STFU and pay up you cheap ****

 

As grateful as a selfish **** can be

 

Have you cleared your PM's yet ?

M

 

The Borrower does benefit, in that they wouldn't get the loan without it. LMI is after all for residential purposes when the LVR is in excess of 80%.

From a sales point of view, however, your friends experience is very ordinary, although, if LMI has been waived, they have had a "win."

 

Reality is, single mum, first mortgage, LVR 80%, LMI is understandable

 

FFS, if it's LMI wouldn't it be Lenders Mortgage Insurance?

 

Yes of course it is.

 

Please ensure accuracy in your posts, that's the millionth time you've made a mistake.

 

I have a mate who had some dire financial troubles a few years ago and had to sell everything in order to pay the debts of his failed business.

He's getting back on his feet now and had a deposit and budget sufficient for a $700k home. No idea who his lender was, but they required him to pay for LMI. The premium was $25k!

 

I paid $25K cash for LMI on my $775K investment property through the CBA after they asked for a $60K cash deposit. I told them I would rather not pay LMI and can put down a $100K cash deposit, but it made no difference to them apparently.

I still had to pay $25K LMI whether I gave them $60K or $200K deposit, it was unavoidable they said. So I just went with $60K deposit being an investment property and I paid LMI on top of that.

Not sure that's how it works, but I bought my property so I was and still am very happy.

 

Doesn't sound so good to me.

Wes?

 

Sounds very odd indeed.

I would suggest you use a mortgage broker. It won't cost you anything as the lenders pay for their service.

 

Hmmmmmm, well it's done now. Was 4 years ago this April and it was the first time I had to pay LMI to buy an investment property.

I have been able to claim back the LMI and a few other borrowing costs each tax time. My accountant set it up to claim it all back over 5 years, a little each year.