LVR and LMI and short term cash flow.

[JohnAJones]

I am having trouble determining with a reasonable degree of accuracy the monies required up front.

An extreme hypothetical to illustrate the point. Lo Doc loan.
If I buy for 500K and valuation is 800K then LVR is below 80% if I am seeking 500K.
If valuation is 500K then 95% = 475K. PLUS huge LMI needs to be paid up front or funded by providor with large increase in interest rate.

So if valuation is done AFTER applying for loan and after Contract Note how can I determine if LMI has to be paid or not BEFORE purchase.

Of course stamp duty is know as well as other smaller costs reasonably accurately.

Thanks

John

 

[FelixL]

For 95% LVR, I think most mortgage insurancer will allow you to capitalise the LMI onto the loan at no cost

 

[Peter_Tersteeg]

LMI rates differ from one lender to another, but as suggested it can usually be capitalised so it's usually not an issue. Let us know the lender, but as a guide at 95% LVR, you'll get change from 2% of the loan amount.

 

[Mofra]

An extreme hypothetical to illustrate the point. Lo Doc loan.
If I buy for 500K and valuation is 800K then LVR is below 80% if I am seeking 500K.
If valuation is 500K then 95% = 475K. PLUS huge LMI needs to be paid up front or funded by providor with large increase in interest rate.

So if valuation is done AFTER applying for loan and after Contract Note how can I determine if LMI has to be paid or not BEFORE purchase.

It may be a moot point, as if your valuation is higher than your COS figure, most lenders will take the lower amount (unless you have pruchased off the plan).