Get a guarantor If you don't have the financial capacity to pay a 20 percent deposit, but you still want to avoid LMI, you have the option of hiring a guarantor for your loan. Usually, a close relative, such as a parent, guarantors can use the capital of your property to help you secure yours. To avoid paying the LMI, the first and most obvious way is to pay the 20% deposit. However, there are many reasons why a buyer may not have this amount available or in liquid cash when looking to purchase a particular property.
To avoid LMI, you'll need a deposit of at least 20%. There have been no changes in regulations related to the LMI, so it would be best to contact a mortgage broker who can offer you a variety of lenders who can help you with your specific needs. There's no doubt that avoiding paying an LMI premium will save you money, but it's worth considering what that savings could cost you. Find out how you can qualify for the LMI exemption for investment properties and how to increase your portfolio with a small deposit.
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. 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. The higher your LVR, the higher your LMI premium, so knowing the cut-off points is a useful strategy for reducing your LMI bill. Since your parents guarantee your mortgage with their own property, not only can you avoid mortgage insurance, but you can also borrow up to 100% of the value of the property plus the costs of completing the purchase.
There is the option of capitalizing on the LMI, in which the lender will add the cost of the LMI premium to your mortgage loan, allowing you to get approved for a mortgage loan with a lower deposit. Mortgage loans for mine surveyors do not include an LMI and interest rate discounts are not available to the general public. Mortgage loans for optometrists come with a lot of discounts, allowing you to borrow up to 95% with an LMI exemption and save thousands more with reduced interest rates. If I'm going to refinance after a 6-month period and don't need an LMI, how do I calculate the amount of the LMI repayment?.
