I have a few IP's and all are around 80% LVR.If I refinance,I am considering paying LMI and aiming for 90% LVR or greater if possible.Does anyone have any thoughts on this?
I have a three IP's with very healthy equity ie $200k ,$170K & $55K repectively. (we have 4 IP's, 3 standalone)
the strategy in the past has been to cross-colateralize with other properies(mainly PPoR )until the particular IP reached the required LVR then the additional security was retired.I'm interested in this notion of "refinancing" to unlock equity to fund more purchases is it similar to the above strategy? maybe the same strategy?
I have a good relationship with the CBA and get a 0.7% reduction an a varibale loans.
Am still learning.
Hi Shane
Firstly you wont get more than 90% these days on a refinance so would need to pick the property / ies that has the most equity.
LMI is a cost of investing and I dont see any problem in paying it if it means getting ahead with my investments.
Fortunately i have very low gearing on my portoflio so am able to access equity with the need of LMI however i would always keep the loans as standalone and never cross collateralise as releasing equity will become harder if the properties are Xed.
Richard Taylor | Australia's leading private lender
Duplicated
Richard Taylor | Australia's leading private lender
Thanks Richard,
I hava made sure all 4 properties are stand alone and would not consider crossing with each other as I don't want the bank to have that much control over me.
I think I would be happy to pay LMI if I could get 90%. How do they work out the cost of LMI? Is it a % of the loan amount?Qlds007 wrote:Hi Shane
Firstly you wont get more than 90% these days on a refinance so would need to pick the property / ies that has the most equity.
LMI is a cost of investing and I dont see any problem in paying it if it means getting ahead with my investments.
Fortunately i have very low gearing on my portoflio so am able to access equity with the need of LMI however i would always keep the loans as standalone and never cross collateralise as releasing equity will become harder if the properties are Xed.
Hi Shane
Yes it is not a simple calculation for each lender.
It is a sliding scale payment based on loan amount (Over $300K and then over $500K increments) the lvr who the mortgage insurer the lender is using (Gemworth have just announced a 20% increase in their mortgage insurance rates) and in some case whether the loan is interest only or P & I.
Be suprised how much you can save on an over 80% LVR by shopping the deal.
Richard Taylor | Australia's leading private lender
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