28 Apr 2017
LENDERS MORTGAGE INSURANCE
WHAT IS LENDERS MORTGAGE INSURANCE
Depending on your lender’s requirements, Lenders Mortgage Insurance allows you to borrow up to 95% of the purchase price of your home, with a lower deposit than is usually required.
Traditionally, lenders require borrowers to have at least a 20% deposit. However, by using Lenders Mortgage Insurance, lenders are able to offer lower deposit home loans. Lenders Mortgage Insurance protects the lender if a borrower is unable to meet their mortgage repayments and the property has to be sold.
HOW MUCH DOES LMI COST?
The cost of LMI can vary depending on the percentage of the property value borrowed and the loan amount. The premium can also vary depending on whether your contribution is made up of genuine savings or has come from other sources, such as a gift.
HOW CAN I AVOID PAYING LMI?
One way to avoid paying LMI is to save up the minimum deposit for the property purchase.
IS IT BETTER TO PAY LMI OR WAIT UNTIL I HAVE A BIGGER DEPOSIT
The answer to this question will vary depending on your individual circumstances and goals. Oracle Lending Solutions can discuss your options with you.
LENDERS MORTGAGE INSURANCE vs MORTGAGE PROTECTION INSURANCE
Lenders Mortgage Insurance is often confused with Mortgage Protection Insurance. Mortgage Protection Insurance insures the borrowers and can cover mortgage repayments in the event of unanticipated circumstances such as unemployment, injury, illness or death.