Better Loan Solutions in Mornington Peninsula • Learning Centre • Frequently Asked Questions
Mortgage Insurance is necessary when purchasing a property if you have less than 20% deposit or insufficient equity in an existing
property.
Lenders Mortgage Insurance (LMI) is one of the most popular ways to achieve the dream of home ownership sooner for borrowers that do not have a large deposit. Most lending institutions require borrowers to contribute a 20% deposit before they will agree to provide a loan. This is largely to protect against the risk associated with providing the borrower with the loan in the event that they default.
By using LMI, Lenders are able to pass on this risk to a mortgage insurer, which in turn enables them to offer the same loan amount but
with less of a deposit. LMI should not be mistaken for Mortgage Protection Insurance, which covers your mortgage in the event of death,
sickness, unemployment or disability. LMI protects lenders against a loss should a borrower default on their home loan.
If the security property is required to be sold as a result of the default, the net proceeds of the sale may not always cover the full
balance outstanding on the loan. Should this be the case, the Lender is entitled to make an insurance claim to the Mortgage Insurer for
the reimbursement of any shortfall, calculated in accordance with the terms of the insurance policy. It is a once off premium and in a lot
of cases can be capitalised with the loan.
This is general information only and is subject to change at any time. Your complete financial situation will need to be assessed
before acceptance of any proposal or product
A mortgage broker can potentially help reduce Lenders Mortgage Insurance (LMI) by leveraging their expertise to find lenders with more flexible loan criteria.
When considering a mortgage, it's advisable to research different lenders and their product offerings to determine if they provide offset accounts as an option. Read More…
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What are the costs of Refinancing?
Several costs come with refinancing a home loan, although some of these costs are added to your new mortgage. You can get a rough estimate of the cost to refinance your mortgage by using a refinance calculator, or engaging a mortgage broker. Read More…
On settlement day, it's important to consider tasks such as reviewing the final settlement statement, ensuring funds are available for the down payment and closing costs, and conducting a final inspection of the property before completing the purchase. Read More…
