Mortgage Choice teams up with Channel 7's West Real Estate Program to discuss Lenders Mortgage Insurance (LMI).
If you happened to miss this recent episode, Mortgage Choice's Jessica Darnbrough talks about what LMI is, and how it works in simple, easy to understand terms.
Many of our clients at Mortgage Choice Armadale don't know much about LMI, so we thought we would help summarise it for you.
Lenders Mortgage Insurance
This insurance is designed to help protect the lender, and not the borrower, if the borrower was to default on the loan.
It is usually a one-off payment that is paid at the time of loan settlement.
As a general rule, if you are looking to borrow 80% or more of the property purchase price, then the lender does usually require you to pay LMI. As you don't have the 20% deposit, the lender could consider you to be high-risk and they won't want to lend you the finance, that's where LMI comes in.
Although it may appear like this only benefits the lender, it does also help you. By allowing you to borrow without having to save that 20% deposit, you can get into your dream home sooner.
If you missed this episode of the West Real Estate Program, you can now watch it here.
For any further queries about Lenders Mortgage Insurance, or other aspects of your next home loan, please don't hesitate to give our team a call today on (08) 9485 0090.
Vaios Toutountzis, Your Local Mortgage Broker
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