Lenders mortgage insurance (LMI) FAQ:
Q: What is lenders mortgage insurance?
Lenders mortgage insurance (Also known as LMI) is a one off, upfront fee that you pay to the lender. This is the banks protection in case you default or don’t make your mortgage payments. It does not cover YOU for anything as it the banks insurance. Paying the fee allows you to borrow more than 80% of the value of the property. Without this fee you will need a 20% deposit, equity in a property or a guarantor. The LMI fee allows you to get into a house with less cash, up to 5% deposit or less instead.
Q: Can the LMI be added to my loan amount?
Capitalizing or adding the LMI fee can be an option in some circumstances. It does allow you to buy a house with less cash but effects the loan amount, your equity and the total interest that you’ll pay back over time. There are only a few lenders allowing this currently.
It is best to talk to us about your options if you are considering adding the LMI to your loan amount.
If you’ve got any questions, please do not hesitate to give Fiona a call on 0412411823!
Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.