LMI when refinancing loan with same lender

[mysterious_guy]

Hi all

I have got a question in regards to LMI if i refinance my current loan with the same lender.

Current value as per lender: $475000

Current Loan amt: $377000

I need to refinance to get around $30,000 - $40,000 for unfortunate emergency.

I wanted to know if i will be paying LMI again as i am not moving to other bank and have been paying mortgage on time since i moved over to current bank 2 yrs ago.
If yes, is there a way to reduce it or is it usually negotiable?

Thanks in advance people.

 

[Peter_Tersteeg]

If you keep the other details of the loan the same (loan term, repayment type), then you should only pay an increase in premium, rather than pay the full premium again.

You haven't provided enough information to make an accurate estimate, but you're probably looking at $900 in the worst case, it could be a lot less. It depends on the current LVR, original LVR, original LMI premium paid, the lender and possibly a few other factors.

 

[HLE]

Hi mysterious_guy

PT_Bear is quite right with his comment. In most cases the premium you pay is an increase to the premium which you already paid in the past. You would not need to pay the full premium.

As a general rule you will need LMI if you are borrowing over 80% of the property value. Your LMI Premium is a once off fee.

Lenders Mortgage Insurers calculate the premium using a LMI Rate Chart or Premium Table. They generally charge a percentage of the loan amount and a percentage of the property value that you are borrowing (the LVR). However, different LMI providers have different premium rates. This means that there can be thousands of dollars in difference, between the cheapest and most expensive LMI providers.

You usually have the option to capitalise the premium. LMI capitalisation is the process by which the LMI premium is added on top of your loan. This is also known as capping the LMI premium or having LMI capped.

Mortgage insurers will also need to approve your loan application. The bank will arrange this as part of their approval process. Some lenders have a close relationship with their LMI provider and so have the ability to approve loans on behalf of their mortgage insurer. This is known as a Delegated Underwriting Authority (DUA) or Open Policy. This means that these lenders are often able to approve loans that would normally be declined by their LMI providers

LMI premiums are non negotiable and must be paid.

 

[Rolf Latham]

LMI premiums are non negotiable and must be paid.

You would know that there are a bunch of exceptions here Im sure

ta
rolf

 

[mysterious_guy]

Thanks a lot people.

Some very informative posts, really appreciate it.

 

[hobbes24]

Hi All,

I'm not exactly sure if the situation below falls under "refinancing". But we have an existing home loan (still with the same bank when we bought the house back in 2008). We are now planning to do a KDR(knockdown rebuild) and I was advised by my bank that we will need to apply for a separate Construction Loan which will be added to our existing home loan package.

Original Home Loan Amount = $365,000 (loan start 2008)
Existing Home Loan Amount = $290,000 (less than 80% of the original home loan amount)
Construction Loan Amount = $550,000

QUESTION:

Will the LMI be computed on the $550,000 only or will the $290,000(loan balance) be included too?

Thanks for any help/info in advance.

 

[Rolf Latham]

Welcome HB 24

if you can tell us the lender name and how much LMI you paid in 2008 we can give you a very good estimate


the LMI premium would normally be shown on the LOAN agreement that you signed with that lender

Usually, you get credit for the previous premium paid IF the loan hasnt been fiddled with, so you only pay a "top up" premium

hope that helps


ta
rolf