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  • Profile photo of opinderopinder
    Participant
    @opinder
    Join Date: 2012
    Post Count: 61
    March 9, 2012 - 6:07 am

    Hi All.

    I would like to get some information/help regarding LMI.

    I have PPOR 380K loan on that had for 2 yrs
    Investment property 600K had for one year
    LMI on that 6000
    Deposit in offset acc 50k

    Just want to know if I had borrowed money from the equity of PPOR 20 percent do i still need to pay for LMI.

    Coz in this case i paid for LMI which i guess I shouldn’t had? Or was there a structuring of loan problem in my case.
    Why did I had to pay for LMI.
    I am not sure how the loan was structured and if I had the PPOR with equity in it why I had to Pay for LMI.

    Bit confused?
    Any advise pls how LMI works and whats the way around to that Thanks in advance.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    March 9, 2012 - 6:28 am

    If you borrowered 20% deposit from your PPOR- then no you don’t need to pay for LMI…

    From the sounds of thing your loans are crossed; crossing your loan benefits the bank as it’s hardier for you to move from that one lender + LMI is more expensive :(

    With 6,000 in LMI and a possible loan amount of $800,000 it means you were over by a few % only..like 83%

    LMi pricing works based ON:
    1. security – Location
    2. LVR amount
    3. Loan amount ( in your case it’s both loan together rather then one single loan amount – hence the higher cost)
    4. Use of funds

    If you did a simple equity release and went with a different bank then you may have avoided the LMI and saved on the $6,000! + spread your risk among 2 different bank ( possibly at a better rate…but def better deal with no lmi)

    Lesson learnt- Shopping around + doing your homework or working with a broker and not just sticking with your current bank because it’s “easy” can save you quite a bit.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    March 9, 2012 - 9:40 am

    Michael makes some good points.

    I'd just add that LMI doesn't need to be viewed as a bad thing – I wrote an article for API magazine on the subject here

    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 opinderopinder
    Participant
    @opinder
    Join Date: 2012
    Post Count: 61
    March 9, 2012 - 12:14 pm

    Thanks michael. i actually did homework n infact i went thru mortgage
    broker reg. the loan he should hsve bettet known. thnks again and
    thanks to jamie too

Viewing 4 posts - 1 through 4 (of 4 total)

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