Hi.
I’m new to the forum and have been investing in property for a few years now.
I was hoping to get some advice regarding LMI on a construction loan.
In summary, I requested pre-approval for a construction loan through a bank at 95% LVR. I put forward the mortgage paperwork and quotation from a construction company.
The loan was approved but the contract with the construction company was cancelled during the cooling off period.
The bank was notified of the cancellation and no funds were released.
Problem being is the bank has debited the construction loan for over $8K LMI and have been charging interest on the LMI for several months.
My question is “Can banks charge LMI even though they haven’t paid any part of the construction loan?”.
I’ve asked for one of 2 situations to happen:
* I’d be happy if they could just cancel the LMI and I pay the application fees.
* I pay 20% deposit for the construction loan with the new builder and they cancel the LMI.At this point in time I am being told that LMI cannot be cancelled in full no matter the situation.
It would be appreciated if someone can provide me with some feedback. I tried finding who governs LMI and Mortgages but wasn’t sure where to start.
Thanks.
Yes, they probably can charge you LMI. This is payable upfron on the loan amount. LMI and mortgages are ‘governed’ by the banks. If you want to make a complaint the first point of call would be to the bank’s complaint department and then try to get onto COSL or the credit ombudsman.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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