If you’re in the market for a home loan, chances are you’ve probably come across some confusing bank jargon!
However, it’s important to understand lenders mortgage insurance, as it could apply to you if you have less than a 20 per cent deposit saved.
For a quick quide to what lenders mortgage insurance is all about, check out the video below as Mortgage Choice chats to the West Real Estate Program:
Lender’s mortgage insurance is an insurance policy which the bank takes out to protect itself in the event that the borrower defaults on their mortgage repayments. It is applied to your loan when you have less than a 20 per cent deposit saved, as the lender may see you as a higher risk.
Will I have to pay for lenders mortgage insurance?
If you are borrowing more than 80 per cent of the value of the property, you will have to pay lenders mortgage insurance. However, your mortgage broker will calculate the cost for you and include this amount in your loan application. So it will usually be added to the total amount of funds that you are borrowing.
Am I protected by lenders mortgage insurance?
No, lenders mortgage insurance exists to protect the banks. Your mortgage broker will discuss with you the different types of insurance that are available to you.
Want to know more? Get in touch with your local Perth mortgage broking experts on 9277 9888, or click on the ‘Contact Us’ button at the top of this page.