LMI on same property with same lender ??

[Et_Abi]

Hi,

I have a property that I bought in 2011 that I paid LMI on and have had revalued this week , which eventually came back in my favour (another thread).

I am looking to borrow against this property to buy some land. Now the NAB has pre-approved my loan and my serviceability is not a problem. However there is not enough equity in the above property and they said I can still borrow the money but may have to pay LMI.

My understanding is that once you pay LMI that premium remains on the loan and only need to pay again if the LMI amount would increase.


To clarify .....

In 2011 (Property A)
purchased price : $ 340K
Loan : $ 323K
LVR : 95%
LMI : $ 8965

In 2014 (Property A)
Value : $ 430K
Loan : $ 298K


So now I would like to borrow another: $ 320K (land price, stamp duty , fees etc)


Can I re structure my loans to:

Property A Loan : $ 375K
Property A Value : $ 430K
LVR : 87%
LMI approx : $ 5500


Land Value : $ 305K
Land loan : $ 240K
LVR : 80%


This should avoid LMI on the land loan and the LMI on Property A is less than the original premium paid.

Does that mean I can Avoid LMI at all in this situation ????


I am not sure if I have this right or not....any help would be great.

Oh and Apologies for the massive post, but I hope I got all the details in one go.


Cheers

 

[Jamie M]

I doubt you'll be able to dodge lmi all together. The top up against the first property should result in an adjustment to the existing premium. The nab banker should be able to provide an indicative figure.

Cheers

Jamie

 

[albanga]

I doubt you'll be able to dodge lmi all together. The top up against the first property should result in an adjustment to the existing premium. The nab banker should be able to provide an indicative figure.

Cheers

Jamie

Hey Jamie,

So even though they have paid LMI are you saying they would still need to pay an adjustment if they pulled the 110k (95% LVR)? How much would this roughly be?

Also as I am a budding finance broker could you just quikcly explain how you would structure this I am guessing 3 loans (existing, LOC and then new land)?

 

[jonmardell]

Hi,

I have a property that I bought in 2011 that I paid LMI on and have had revalued this week , which eventually came back in my favour (another thread).

I am looking to borrow against this property to buy some land. Now the NAB has pre-approved my loan and my serviceability is not a problem. However there is not enough equity in the above property and they said I can still borrow the money but may have to pay LMI.

My understanding is that once you pay LMI that premium remains on the loan and only need to pay again if the LMI amount would increase.


To clarify .....

In 2011 (Property A)
purchased price : $ 340K
Loan : $ 323K
LVR : 95%
LMI : $ 8965

In 2014 (Property A)
Value : $ 430K
Loan : $ 298K


So now I would like to borrow another: $ 320K (land price, stamp duty , fees etc)


Can I re structure my loans to:

Property A Loan : $ 375K
Property A Value : $ 430K
LVR : 87%
LMI approx : $ 5500


Land Value : $ 305K
Land loan : $ 240K
LVR : 80%


This should avoid LMI on the land loan and the LMI on Property A is less than the original premium paid.

Does that mean I can Avoid LMI at all in this situation ????


I am not sure if I have this right or not....any help would be great.

Oh and Apologies for the massive post, but I hope I got all the details in one go.


Cheers

Your figures are correct but there is a minimum LMI premium with NAB of 500 plus the stamp duty of 10% so you should be paying $550 for the LMI on the increase.

 

[jonmardell]

yes 3 separate loans, LMI would be calculated at todays rates less the premium already paid with the minimum premium of 500 plus stamp duty for NAB

Hey Jamie,

So even though they have paid LMI are you saying they would still need to pay an adjustment if they pulled the 110k (95% LVR)? How much would this roughly be?

Also as I am a budding finance broker could you just quikcly explain how you would structure this I am guessing 3 loans (existing, LOC and then new land)?

 

[albanga]

yes 3 separate loans, LMI would be calculated at todays rates less the premium already paid with the minimum premium of 500 plus stamp duty for NAB

Thanks for clarifying jonmardell,
And the splits I am guessing would look something like
Loan A - 298k
Loan B - 110k (LOC from A equity)
Loan C - 320k for land

Or have i missed the mark?

 

[Terry_w]

Just ask NAB for a quote.

 

[Jamie M]

Hey Jamie,

So even though they have paid LMI are you saying they would still need to pay an adjustment if they pulled the 110k (95% LVR)?

Yep - LMI will always charge something. Good business to be in

Cheers

Jamie

 

[Et_Abi]

Your figures are correct but there is a minimum LMI premium with NAB of 500 plus the stamp duty of 10% so you should be paying $550 for the LMI on the increase.

Happy to pay that if I can .....

I'll see how I go

at the moment they have structured it to pull $44K out of property A giving LVR of 80%

Then paying LMI on the Land of $ 3900 ish ..... $550 sounds like a much better deal