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Posts Tagged ‘Lenders Mortgage Insurance’

More options for low deposit Home Loans

Posted by Tamara McDowell on August 24, 2010

For potential property buyers with only a small deposit, the news on the home loan front keeps getting better.

After announcements earlier in the week from a handful of lenders that low deposit (95%) home loans were back on the agenda, more lenders have added low deposit products back into their home loan suites.

First home buyers often find low deposit home loans useful, particularly as the time taken to save a deposit has blown out in recent years.

Conditions do differ between lenders, but there may also be the option of capitalizing your Lenders Mortgage Insurance, effectively taking your borrowings to 97%, again something that will benefit first home buyers in particular. Check with your mortgage broker for details.

Despite the return of the low deposit loan, it is unlikely that no deposit home loans will be revived, in part due to bank and lenders not having the appetite for risk, and in part due to new legislation for the industry requiring more in-depth investigation into a borrower’s ability to repay a loan.

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Posted in (LMI) Lenders Mortgage Insurance, Bank & Lender News, First Home Owners, Loans, Mortgage Broker Service | Tagged: , , , | 2 Comments »

Basic Lending Terms Explained

Posted by Tamara McDowell on February 15, 2010

The following is a list of terms and words (and their meanings) that you may come across when purchasing a home and dealing with lenders. This list is not comprehensive, therefore if you come across any other terms that you do not understand please contact your  Mortgage Consultant.

It is particularly important that before signing you fully understand the terms of any contract, whether it is a purchase contract or loan contract. Once signed and executed it becomes legally binding on you. Read the rest of this entry »

Posted in First Home Owners, Investors, Loans, Mortgage Broker Service | Tagged: , , , , , , | Leave a Comment »

What is LMI – Lenders Mortgage Insurance

Posted by Tamara McDowell on February 6, 2010

Lenders Mortgage Insurance (LMI) is a premium paid by you to insure your Lender against loss.

Lenders Mortgage Insurance (LMI) helps Australian homeowners enter the market earlier through allowing you to borrow a higher percentage of a property’s value.

For first home buyers, particularly those struggling to save a deposit but more than comfortable to meet their
mortgage repayments, it can be a key tool to break free of the rental trap.

Through financing a higher proportion of a property’s purchase price, lenders take on a higher level of risk should you fail to meet mortgage repayment, and the property needs to be repossessed and resold.

LMI is therefore payed by you to insure your lender against loss should this happen. It is important to be aware that
LMI only covers the lender if you default, not you.

The bigger the percentage of the property’s purchase price you have to borrow the greater the amount you’re likely to pay on insurance. So if your deposit is less than 20 per cent, and especially if you have no deposit at all, you will need to factor LMI into your home loan.

Remember that should you have the required 20 per cent deposit for a mortgage you will not need to pay LMI.
LMI is usually paid as a one-off lump sum at the time of settlement but it many cases it can also be added into the loan amount and paid off over the life of the loan – a term known as capitalising the LMI.

Speak with your broker to assess whether this option is right for you.

Posted in (LMI) Lenders Mortgage Insurance, First Home Owners, Investors, Loans | Tagged: , , , , , , , | Leave a Comment »