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Lender’s Mortgage Insurance is a once off cost to you for an insurance policy that covers the bank for any economic loss e.g. if you weren’t making your contractual repayments and the Lender has to repossess your house to then sell it for lower than what you owe the bank. The insurance policy covers the loss between the sale and the balance owing. The lender then has the right to pursue you for reimbursement.
This is why Lender’s Mortgage Insurance premiums are always higher when you have a lower deposit, as the risk of a loss is higher because the gap is smaller.
Our Mortgage Brokers are here to assist you with any questions on the above. Please call us on 1300 559 949 or email firstname.lastname@example.org.
Lender’s Mortgage Insurance is only applicable for any Home Loan that is greater than 80% of the value of the security property/ies, however, if you are borrowing more than 80% there are still ways to avoid having it come out of your pocket.
• 20% deposit – Lender’s Mortgage Insurance is not applicable if you have a 20% deposit from any source i.e. sale of asset, saved, gifted, additional security property i.e. guarantee (refer Can my parents or other family go guarantor?)
• Add the Lender’s Mortgage Insurance premium to your loan – Lender’s Mortgage Insurance is applicable if you are borrowing greater than 80% of the value of your security property/ies, therefore you have the option to add the premium to your home loan.
Some Lenders have restrictions as to how much you can add to your home loan but generally with assistance from your Mortgage Broker you shouldn’t have to pay any shortfall out of your own funds.
Our Mortgage Brokers are here to assist you with any questions on the above. Please call us on 1300 559 949 or email email@example.com
Lender’s Mortgage Insurance premium isn’t charged until the day of settlement and you will be notified on your home loan contract what the premium is so you know what to expect before committing to the loan.