a. What is Lenders Mortgage Insurance?

=> Lenders Mortgage Insurance (LMI) is one of the ways to help you achieve the dream of homeownership sooner without having the 20% deposit which is typically required by most banks and financial institutions.

With LMI, lenders may allow you to borrow a higher proportion of the purchase price, allowing you to purchase a property with a smaller deposit than would otherwise be required. It may also enable you to borrow at an interest rate that is comparable to a borrower who has a larger deposit.

b. Who is insured?

=>The lender is the insured party, not you, the borrower, or any guarantor. Lenders Mortgage Insurance protects the lender against a loss should the borrower no longer be able to afford their loan repayments and the Guarantor (if any) is unable to meet the liability.
Lenders Mortgage Insurance should not be mistaken for Mortgage Protection Insurance, which covers your mortgage in the event of death, sickness, unemployment, and disability.

c. Why does my loan require Lenders Mortgage Insurance and how can it benefit me?

=> By reducing the lender’s risk at the outset, taking out Lenders Mortgage Insurance allows you to purchase your dream home with as little as 8% of the purchase price. This can open up many possibilities for you as a new homebuyer – better location, larger house, ability to do renovations – simply put, LMI brings you that much closer to achieving your homeownership dreams, years earlier than you ever thought possible.

d. What costs are involved?

=> Unlike traditional insurance products, there is a one-off premium payable for LMI. This premium is charged by the LMI provider to the lender, who typically passes this cost on to the borrower. The premium is payable when the loan funds are advanced and provides cover for the full term of the loan. The cost of Lenders Mortgage Insurance varies depending on the amount of the loan, the level of your equity in the security property, and the level of risk associated with the particular loan product. Some lenders will allow you to add the cost of the LMI premium on to your loan meaning you will not have to pay this amount upfront.

e.Who is eligible to get LMI exemption with the deposit of 90% LVR?

=> The Medical Professional Offer allows eligible Medical Professionals to apply to have Lender’s Mortgage Insurance (LMI) to be waived as part of the Mortgage Advantage Package. It’s available for Eligible loans with LVR below 90% (ie maximum base LVR is 89.99%) subject to credit approval.

::: Eligible Professions:::

  • Anaesthetist.
    Cardio-Thoracic Surgeon
    Clinical Pharmacologist
    Cosmetic Surgeon
    Ear and Throat Surgeon
    Emergency Surgeon
    Gastro-Intestinal Surgeon
    General Practitioner (also known as Medical Practitioner)
    General Surgeon
    Neuro Surgeon
    Oral and Maxillofacial Surgeon
    Orthopaedic Surgeon
    Orthopaedic Registrars
    Paediatric Surgeon (Neonatal/Perinatal)
    Plastic Surgeon
    Radiologist (Note: this does not include Radiographers)
    Reconstructive Surgeon
    Respiratory/Thoracic Surgeon
    Vascular Surgeon

NOTE: The Medical Professional Offer excludes the following professions: Physiotherapists, Pharmacists, Psychologists, and Nurses.

In addition to the standard application procedures, you will need to complete the following steps to verify the customer’s profession and that they are registered.
1. For non-veterinary professions,
Go to the Australian Health Practitioner Regulation Agency (AHPRA) website.
Input the relevant fields in ‘Details of practitioner’ and ‘Principal place of practice’ sections and click ‘search’.
Ensure the Profession is one of the ‘Eligible Professions’ listed above, the Registration Status is ‘Registered’ and the Registration Type is ‘General’ or ‘Specialist’.
Click ‘Print Page’ on the website to confirm the practitioner’s details and attach it to the application; OR input the AHPRA Registration number and Profession in the Comments screen.

Source: CBA

Note: Sometimes some lenders bring an offer with 85% LVR with no LMI and so on. we will keep update on that too.

If you have any question, please call me: Kishor 0433 589 626

LAXMI Home Loans – Australia

Laxmi Home Loans