Loan is more than the value of the property

My loan on investment house is $209,000.
The value, once $240,000, is now $180,000 - $190,000.
90% loan originally with LMI.

When I sell the place for $180,000, will I need to cough up the difference or with LMI take care of that>

Lender is CBA.

Thanks for your thoughts.

 

Hi Adelaide,

You will need to cough up - sometimes the lenders will allow an unsecured loan for this, or you can use equity in another property - make sure you structure the loan correctly though or it can get messy, particularly if using equity in your home.

 

Firstly you can sell, but you won't be able to settle without the mortgagee discharging the mortgage. They won't do this until the loan is paid out in full. So there would be no question to LMI coming to the party unless the bank took possession and then themselves sold as the mortgagee.

LMI would then cover the bank, but LMI would come after you to the money they paid out.

 

You've have to cough up the difference - unless you can work out some sort of unsecured lending with the bank.

Cheers

Jamie