The LMI is only required when the deposit is less than 20% of the price. Although the cost of the LMI is paid by the landlord, your coverage protects the lender. The LMI is a single, non-refundable payment that must be made at the time the loan is liquidated. You can pay the amount in advance, or you can ask the lender to add it to your total loan and cancel it while you make your loan payments.
The actual cost of the LMI will vary depending on the total amount of the loan, as well as the policy and terms of each lender. The cost of the LMI premium depends on the amount you borrow and the value of the property, as well as other factors, such as your employment and the type of loan you get. Even if you don't reach the full 20%, the closer you get, the lower the loan-to-value ratio and the lower the cost of the LMI. If you're thinking about buying a home but don't have a 20% deposit, you'll generally have to pay for the lender's mortgage insurance (LMI).
The LMI is a one-time payment that can be included in the total cost of your loan or paid in advance at the time of settlement. The exact cost of the LMI varies from lender to lender, so it's worth talking to your Smartline advisor for more information. When buying a property, most lenders will require you to have mortgage insurance (LMI) for lenders if you apply for a loan of more than 80% of the value of the property. In general, the LMI is calculated on a sliding scale, so the more you can contribute to the deposit, the lower the loan-to-value ratio and the lower the LMI you'll pay.
The FHLDS and the New Home Guarantee allow first-time homebuyers to qualify to buy a property with a deposit of only 5%, plus the costs of the loan, without needing to purchase mortgage insurance (LMI) from the lender. Some lenders will exempt or reduce the LMI premium for certain occupations that are considered to be at lower risk of losing their jobs, such as doctors or dentists.
