All Topics / Finance / Paying mortgage insurance twice?

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of Sam WSam W
    Participant
    @sam-w
    Join Date: 2014
    Post Count: 7

    Hello

    Im currently looking to switch the mortgage for an investment property from PI to IO. My lender has now told me i will have to pay mortgage insurance again. Im told the reason behind this is because with the valuation staying the same as what the purchase price was three and a half years plus what i have paid off doesn’t cover the 20% needed to not qualify for mortgage insurance. They are classing this as a whole new loan. Ive never heard of this before and it has blind sided me. Ive paid it once and won’t get a refund on the mortgage insurance I’ve already paid. Is this the norm in this situation?

    Regards

    Sam W

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Sam

    Seems a bit weird.

    Is this Anz?

    You’ve got a couple of options. Speak with a decent finance person and look at the option of staying with your current lender and the costs involved and ordering a couple of upfront valuations with different lenders and refinancing.

    There’s pros/cons of both approaches.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Sam WSam W
    Participant
    @sam-w
    Join Date: 2014
    Post Count: 7

    Hi Jamie

    The loan is through NAB. They are asking for around $500. In regards to refinancing and external valuations, wouldn’t the money they are asking for quickly get eaten up by these other avenues?

    Regards

    Sam W

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Have you thought about getting a couple more upfront vals with different lenders to see if you can get a better result?

    Admittedly there are fees with refinancing (prob higher than the $500 in LMI you’re up for) but if you get a better result you might also be able to pull out some equity whilst converting it to IO (that’s if you’re wanting to do so). Some banks are providing cash backs for refinancing too.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Has the property declined in value since the purchase? For LMI to be liable on a refinance in that scenario the LVR would need to have increased and or $ value of the loan in the meantime.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    If the loan term is the same and not being extended then there should be no additional LMI.

    Get your NAB Banker to give you a written explanation before proceeding.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Sam WSam W
    Participant
    @sam-w
    Join Date: 2014
    Post Count: 7

    The properties value has stayed the same according to the banks valuation. I will ask for the explanation in writing before i proceed any further. Thank you all for your input.

    Sam

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Something definitely doesn’t stack up. It’ll be interesting to see what the banker comes back with.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Sam WSam W
    Participant
    @sam-w
    Join Date: 2014
    Post Count: 7

    Evening all

    Well after requesting an explanation in writing they came back and told me that since our last payment went through we now have the required 20% and no longer will need to pay mortgage insurance. Seems incredible convenient of them. I had a gut feeling if i pushed this issue it would go away.

    Regards

    Sam

Viewing 9 posts - 1 through 9 (of 9 total)

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