Thanks for your reply Terry to my questions on LMI:
LMI is generally only paid if the LVR exceeds 80%. However, you may have to pay it on some low docs at lower LVRs.
So if you can borrow the 20% deposit from equity in another property (eg a LOC), then you can avoid LMI. Having a trust doesn’t change this.
My query relates to a unit holder of a HDT, using a company setup, borrowing the full amout to invest in an IP. Assuming I have an LOC against PPOR and put up a 20% plus costs towards a deposit, I need to seek another 80% finance from another institution (full doc). Then,
1. Is this a legitimate way of avoiding LMI? (the loan application would involve disclosing all liabilities including LOC)
2. If so, would it not cost me more in terms of higher interest rate, or upfront costs, as the bank perceive it as a risky lend?Sorry about my ignorance. Your input is much appreciated.
CT
Hi CT
Yep, since the unit holder is only borrowing 80%, then LMI won’t (usually) apply.- It may be charged on some low docs loans however.Banks won’t perceive it as more risky, same rates etc apply.
Terryw
Discover Home Loans
Parramatta
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Finally, the pennies started to drop. Thanks Terry.[lmao]
CT
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