Love / Hate relationship with LMI. Is it just me?

Here we go again, looking for more money from the banks.

Sure they say, but it will have to be a low doc. Which means not just insurance on the new loan, but also on the mortgage that I'm using to drew the deposit from. They hit you twice !

This will be the fourth time since 2005. So it doesn't come as a surpries to us. But the cost of it all you've gotta hate. Around the 12k to date, if this goes ahead. Almost enough for a decent car ??

Eventually the bitterness fades and I start to begin to love the new figures.

Just wondering how much others have forked out for LMI over the years ?
Can someone do a poll on it please.
 
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The Wild One

Have you considered using a separate lender for the new purchase away from your existing loans as it maybe that your exposure with that lender has increased to a level that the premiums have started to mount.

At an 80% and below lvr the premiums on lodoc under say $500K wouldn't be that bad.

Shop around and I am sure you will be pleasantly suprised as the premiums vary from lender to lender.
 
4 times and probably ~$32k in total. The biggest two were $10k & $13k. I did get a refund of 40% on the $10k however about 9 months later after I took the initial loan.

Well the fourth time the bank actually forgot to debit the amount from my loan account :D That was the $13k too.

It was good for me as I built up my IP portfolio. The LVR's were 85%, 97.5%, and 90% (twice). One (1) for a new purchase, the other three (3) for re-finances.

Where I am today, my attitude and even need to use LMI has changed, so I don't look at is as a future requirement for me. Maybe that also reflects the times. Its served me well however.

I am guessing that in the future, I may need to have access to Lo-Doc loans, so LMI may need to come into play for those purchasers. Never say never.
 
I have a couple of options, so I beleive ?

What has been suggested to me is to start a new loc for $100k secured against three ip's with CBA. The total LMI would be approx $3500 with a total of $434,000 borrowings.

Then apply for a pre-approval with W.pac for 280k with a low doc also. LMI approx 2000.

LMI has worked OK for me in the past. It has enabled us to purchase about another 750k of property.

The other option was to give W pac some more properties at a cost of $1500. But we'll still be left paying LMI for a new loan of $380k.

Might have to edit this later. Have to go.
 
Using different lenders with differet insurers could make it cheaper for you. Also maybe completing tax returns could assist?
 
All was good a couple of months ago.

CBA had changed their criteria as of the first of July. They now take the average gross income over the last two years. Not just the last financial year.

Makes it hard to play when they change rules without telling you.
 
perhaps look at some other lending options so u can get to full doc

LMI and lo doc above 60 % is "pretty much" a gov mandated thing, so give Uncl kev a call. Seriously though, while this seems like a lot of money, in thr true scheme of things, LMI on lo docs is smallish, compared to for eg LMI on a 95 % lend

ta
rolf
 
Thanks guys.

Rolf and Qld007, there was something else that came across as odd to me.

I'll have to ask my MB again to make sure I heard him correctly. But he said something about that the banks don't like loan applications where the rental income is greater than your earnings. He said, he actualy brought this up with one of them, to point out that rental income is more secure than peoples jobs. Apparently this old rule hasn't been changed since the early nineties.
 
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Here we go again, looking for more money from the banks.

Sure they say, but it will have to be a low doc. Which means not just insurance on the new loan, but also on the mortgage that I'm using to drew the deposit from. They hit you twice !

This will be the fourth time since 2005. So it doesn't come as a surpries to us. But the cost of it all you've gotta hate. Around the 12k to date, if this goes ahead. Almost enough for a decent car ??

Eventually the bitterness fades and I start to begin to love the new figures.

Just wondering how much others have forked out for LMI over the years ?
Can someone do a poll on it please.

I've never done LMI.

To me, it's a sign that the deal is a bit on the precarious side.

The Banks are not keen, so handball it to the LMI crowd to cover their derrier. What does this tell us?

On top of this, it's an extra amount of money to cut into the bottom line.
 
This is why it's a love hate relationship. I have loads of equity, and plenty of available funds in my LOC's for a rainy day. But I want to keep that there for just that and not have to use it for the next deposit. I'm not about to go broke any time soon. But to access my equity they require I use LMI.

Stinks !
 
A few points/questions

(1) are all the properties x-colled? LMI premiums go up increase if they are - if so - I wont say this is bad but it may not be helping you
(2) can you split one property off and do a 60% lend
(3) still other lenders out there who'll work on last years trading figures so you may not need to low doc to begin with
(4) rental reliance is based on the deal and being used as a cop out but that seems to be a bit tough.
(5) with their changes in servicing and policy CBA is (IMO) one of the last places to run a low doc thru over 60%.
 
Yeah, that's alot.

No doubt Blue Card, you probably feel as I do. What a rip off.
Some one is making some good money.

Why does the insurance have to be on the entire loan and not just on the 20% deposit. We can insure our buildings for a fraction of the price, which are just as likely to burn down or get hit by storms.
 
because there's probably a kickback for the bank as well.

double whammy - like GST inside stamp duty.

i guess it's a rip - but last i heard block where i'm buying have increased $80k in the past 8 months - $10k per month = 1 month to pay off the LMI.

i'd rather swap $8k for $72k than nothing for nothing.
 
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