Loans with MI - What happens when you re-finance?

[buzzlightyear]

Was having the discussion with a few mates over the weekend, and the topic got on financing with LVR's requiring LMI.

If you initially required MI and had either PMI or Genworth being the insurer, say you re-finance after 'x' months and your new loan is 80% (I am assuming full-doc loan), what happens to the record of the loan with the MI?

Does it stay on their books as your history with them or does it get wiped?

 

[Rolf Latham]

Hiya

Usually gets wiped, but you cant assume anything at the moment

ta
rolf

 

[Bradsdad]

Don't take this as gospel but i'd suggest your record would be kept for 7 years. I however don't have any knowledge of either of their internal computer systems. It would suprise me however if your name didn't highlight an any future deals within 7 years as after all, they are an insurance company and trying to minimise their risk.

I would suggest also checking with the lender about the ability (if any) to get a partial rebate on any premium already paid due to the timeframe mentioned.

Regards
Steve

 

[Aimjoy]

Was having the discussion with a few mates over the weekend, and the topic got on financing with LVR's requiring LMI.

If you initially required MI and had either PMI or Genworth being the insurer, say you re-finance after 'x' months and your new loan is 80% (I am assuming full-doc loan), what happens to the record of the loan with the MI?

An answer to a question that you did not ask, but if you refi within 24 months it is "usual" to get a 40% refund on the MI premium you paid. I've has this on a couple of occasions.

Does it stay on their books as your history with them or does it get wiped?

I'm unsure about their (MI's) books but the original enquiry by the MI, along with the lender, stays on your Veda Advantage file for the requisite 5 or 7 years as per normal.

On a wider issue I'm wondering why the Q in the first instance?

 

[Andre Kyburz]

Loans with LMI - What happens when you refinance

Hi Buzz,

As some have already replied, in general the LMI insurers will have a duty to keep records for 7 years but that does not mean your file stays active on their underwriting systems.

If your previously insured loan is discharged, the lender should notify the insurer and the loan should be closed on the lenders and insurers system. They have a vested interest to do that as it will automatically free up their regulatory capital requirements.

Usually the loan will then stay on their underwriting system as "closed or inactive" for another 12-24 months before it gets purged into archive.

Another story if the lender has its inhouse or captive LMI company and only reinsures with PMI, Genworth on a portfolio basis (so called excess of loss cover over the lenders whole portfolio), in these instances the PMI's and Genworth's of this world would probably not have data on your individual loan at all.

Cheers
Andy