Lenders Mortgage Insurance

Did you know that the difference in LMI (Lenders Mortgage Insurance) premiums can be thousands of dollars from lender to lender?

Lenders mortgage insurance is when a lender takes out an insurance policy on a loan in case you cannot meet the repayments. If for some reason you stop making the loan repayments and after all attempts from the bank to help this situation, the bank can and probably will take the property from you. When the bank then sells the property again, if there is a shortfall in what they achieve in the market place verse your loan amount plus any selling costs, the insurance policy will cover the shortfall. The insurance does not help you the borrow at all.

The cost of lenders mortgage insurance can be quite expensive, depending on the loan amount and the LVR in which you borrow @. If you have enough funds to purchase or refinance without LMI, it’s always recommended. When borrowing for investment though, LMI can be a tax deduction, speak with your accountant to see if this applies to you.

Lenders Mortgage insurance, although quite costly, has enabled the innovation of a diverse product range. For example, without Lenders Mortgage Insurance, we may not have 95% loans or Low Doc lending, thus making the market cheaper overall, imagine having to come up with a deposit of $60,000 for a property of $300,000, it would take a far longer period, and may even be out of reach.

Speak with a representative @ the wHere group about the cost of mortgage insurance for you.