LMI question -Does bank include stamp duty in LRV

Discussion in 'Loans & Mortgage Brokers' started by robl, 30th Sep, 2018.

Join Australia's most dynamic and respected property investment community
  1. robl

    robl Member

    Joined:
    25th Sep, 2018
    Posts:
    14
    Location:
    Melbourne
    Hi there! Two questions actually

    The banks keep telling me much lower LMI than the calculators do. I’m looking at a 90% lvr loan on $655k and am being told between $8-10k. Seems low. It does work out to this when I add in the $14k of fees and stamp duty on top of the purchase price on the calcs. Any insight?

    Also why is my preapproval for my loan seeming to come up to more money than a 90%lvr loan should. I.e preapproval provides about $5k more.
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,598
    Location:
    Gold Coast (Australia Wide)
    Lenders will do a max loan to value - depends on lender and needs to have the LMI paid out of that MAX lvr.

    Stamp duty is usually paid from your funds.

    Say if the max lvr a lender will do is 95 % inc the lmi premium, then the base max might be 92 %.

    Doing it that way, and adding the LMIpremium is more cost effective, since the premium at 92 is much less than at 95.

    Sweet spot many times is 88 % + lmi

    Some LMI providers provide some nice discount for FHB

    ta
    rolf
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,598
    Location:
    Gold Coast (Australia Wide)
    PS

    the stamp duty on the LMI premium is obviously not the stamp duty on the purchase, and the Stamps for the premium need to be paid at the time of the lmi

    ta
    rolf
     
  4. robl

    robl Member

    Joined:
    25th Sep, 2018
    Posts:
    14
    Location:
    Melbourne
    Thanks Rolf! This helps. Yeah I couldn’t figure why my lmi was such a low amount and have been told it’s due to me trying to keep LVR to 90. After that it jumps up so high. Maybe it’s FHB and maybe it’s a sweet spot calculation they found. Thanks!!
     
  5. jazzsidana

    jazzsidana Well-Known Member

    Joined:
    27th Jan, 2018
    Posts:
    459
    Location:
    Melbourne
    LMI does sounds low..

    Should be close to $15k roughly..


    upload_2018-9-30_17-21-50.png

    Feel free to inbox if need to discuss precise/more accurate numbers based on personal situation...

    Cheers,
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    LMI varies considerably between lenders too.
     
  7. jazzsidana

    jazzsidana Well-Known Member

    Joined:
    27th Jan, 2018
    Posts:
    459
    Location:
    Melbourne
    True that!!