How much LMI?

hey guys
Looking at buying a $550k PPOR, currently have 5% deposit + stamp duty saved up. NAB are offering 95% LVR - however my mortgage broker just told me their LMI is $20,000 !!!!!!!!!

My first property 4 years ago (now sold, not using equity, etc) LMI was about $4-8k no way near $20k

Is that normal now days? So damned high...
 
It can vary a little from lender to lender and is calculated on a 2 tier basis.
The percventage it's calculated on varies according to the LVR. Being at 95% you are at the top tier and then the percentage will also vary according to the loan amount. Loans below $300k attract a lower premium than those over.
 
its the risk :)

and the 500 k peg is a major step up with most LMI providers

You can get ti down to around 16 incl stamps depending on the provider and lender

ta
rolf
 
you'd also better make sure you have a good asset position for age for them to approve over 90... if NAB Homside - they approve less than 20% of 90%+ Loans.
 
I am not a mortgage broker but have a pretty good track record of getting 97% loans (includes LMI capitalised).

I just had one done recently where I am only tipping in a 5% desposit, legals and stamp duty. I will be in the deal for about 21.5K.

The key to getting past people like Genworth (mortgage insurer) is cash flow. I find that I am getting the deals where others are being refused primarily because:

1. I tend to present my all my financials - i.e. rents, margin loans, credit cards, shares, assets (includes stuff you have paid off), mortgages, company financials up front. Very rarely do them ask me for any...in otherwards I bamboozle them with paperwork.

2. I spread my mortgages and cash in 100% offsets across multiple banks.

3. I am fortunate to have a great cash flow....this is one of the biggest triggers.

4. My loan history and loan applications on my CRAA does not have multiple hits. Once I make my mind I do not shop around for other lenders.

5. Where possible I get LMI approval in principle prior to buying something. This way I can go to an auction pick up something and still be able to do a 5% loan. If I buy at auction so long as the valuation stacks up....I will be able to get a 97% lend.

I was told by my lender the insurer now understands me and the next loans will be quite easy.;)

Incidently my LMI on a 255k loan on a 263.5k buy price was around $5650. I have another loan at 97% approval in principle for 200k and the LMI was about $3800.

To me LMI is just a cost of doing business. Over 5 years I will get 40% of the cost back via tax deductions.
 
Hi Sash

4 keys there that I generally agree with

1. Dont shop with formal apps, and dont buy the "she willbe right) story that some lenders and brokers feed you
2. Smaller value loans and securities have a much lower risk profile than
3. Cashflow is important, but only to a point. The LMI providers have found that willingness and capacity to pay vary a lot as apparent cashflow increases.
4. Spread the business


One thing Im not 100 % with is the preapprovals.............dont like them much anymore since one too many can blow u out with quite a few lenders now


ta
rolf
 
OK.. the target price is $500k.
so i have my 5% deposit and half of my stamp duty saved so far.. i was starting to get excited to buy seeing as i'd get the other half of the stamp duty over the next few months..

What do you all recommend I do? Should I continue to save the $20k LMI, or start talking to brokers about getting a loan with the LMI in the loan? do i have any hope of finding this?

I've always been patient but i really want to get back into the market as soon as possible..
 
Hiya

A 97 is poss, we did a 700 k 97 a little while ago.

BUT wont be straightforward and you may run into trouble with the issue that many lenders above 90 % want u to be an exist client of some sort

ta
rolf
 
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