10% Deposit, LMI?

Hey

I know the 'Big 4' banks will usually have LMI unless a 20% deposit.

Are they're plenty of lenders who void the LMI payment with just a 10% deposit?

I remember this was Libertys entire game from memory. Whats the downside to these guys?

Also i know alot of brokers like the 'Big 4' what benefits are their with the big 4 compared to these other smaller style lenders who offer potentially better rates.

- Less Fees/annual charges ?
- Greater Security?
- Better for the ability to buy future investments?

Edit: Side Question. Is it possible to refix loans to be able to pay IO for longer than the 5 year period? Complications and consequences that arise with that?

 

For certain professions yes - doctors, etc

Cheers

Jamie

 

So no other lender offer a reduced deposit to avoid LMI? (for non doctors)

What about nurses?

 

Citibank does 85% no LMI but conditions apply such as no high density units, vacant land, construction loans, minimum income of $180,000 for the application, etc. Just be careful you are not paying for the loan in the long term.

For the 90% no LMI you don't have to be a doctor - it also applies but not limited to solicitors, Accountants, Celebrities, Sports Professionals, Judges, Chuck Norris, etc but again certain conditions apply.

 

So id guess id just have to speak to my broker about being applicable to the 85 or 90% NO LMI offers.

eg: I think our income would be about 145k

 

What is your profession and why do you want to avoid LMI so badly?

Do you know that LMI credit are re-usable with a lot of lenders?

 

FHB - First Home Buyers ? Is that what i gather from your post.

Cheers rolf

 

Maybe i need to understand alot more from LMI and what it does. My basic understanding was it was a way banks could charge more and make more money only for it to protect themselves and not do much for the people lending other than allow them to potentially enter the property market earlier than otherwise they could. Is that a good grasp or am i missing some key points here?

I have paid LMI before for an investment property. Can you explian the LMI being reusable. I paid >5k LMI before can this be reused with the next purchase?

 

LMI is a penalty, fee, cost, etc however you want to slice and dice it so no its not good but once you look at the bigger picture being potential leverage strategies then it may be a useful tool.

A lot of bankers and brokers will say LMI is bad but most haven't grasped the leverage concept, are thinking transactionally and/or don't know you can reuse the LMI credits.

If you have paid LMI say $5,000 and you want to do a top up and the LMI is now say $6,000 then the lender will deduct the credit of $5,000 paid already meaning you just pay the difference.

Please note that I'm not advocating everyone to go out and leverage to their eyeballs but look at the bigger picture and determine if its a useful strategy to use.

 

I forgot to mention that Pepper also do the 85% no LMI - it must be owner occupied and P&I however you pay for it on the rate side hence why I don't think its a good long term solution.

 

Just so i can try to understand this exactly

Say ive paid 5k in LMI for Investment property and looking to buy another property. With our deposit the LMI is 8k. Does that mean we only pay the 3k difference for LMI?

Or have i got this wrong.

 

But if you can void then that is ideal. However the big picture needs to be taken into account ie one variable. Movement of market. It may be worthwhile entering earlier paying greater LMI if you predict through research that the price of your property will increase at a greater rate than that LMI compared to - had you waited to save a deposit big enough to avoid LMI

 

haha

The LMI provider actually pays Chuck Norris to take out a loan

 

Does PC celebrities count?

 

Only Mac celebrities count

 

AFAIK, LMI is per mortgage unless you are porting securities. It's useful when extracting equity to higher than 80% LVR.