LVR & LMI question

[sashatheman]

Hi guys



When my wife and I got our homeloan our loan to valuation ratio (LVR) was around 90% and the lender's mortgage insurance (LMI) was included in the mortgage. However now it's around 75%.

Q1)Is there any advantages now that we are below the 80%? We have our mortgage with commonwealth and its less than 2 years old. Can we ask to have an interest rate reduction?

Q2)If we were to get an investment property and the LVR of both properties came to around 85%. Do we pay LMI again?

Q3) If we want to refinance when does the revaluation of a property happen? How much does it cost usually to refinance including the revaluation.


Thanks for taking time to answer my questions.

 

[1911naomi]

Q1)There is no harm is asking for a discount but it is normally based on how much lending you have with the bank and not what the LVR is.

Q2)Any amount over 80% you will have to pay LMI

Q3) You need to check with CBA if they have an exit fee. Some banks charge around $700 for loans under 4 years and more if loans are fixed. Other banks can also charged application fees even if refinancing.

There are packages you can join that waive fees.

As you are under 80% LVR now there is no harm asking other banks what they can offer then going to CBA to see if they can match and leave if they cant

 

[Rolf Latham]

Q1)

Q2)Any amount over 80% you will have to pay LMI

True in most cases. Some lenders like WBC are now waiving LMI to a max lvrof 85 % for most clients and properties

ta
rolf

 

[Peter_Tersteeg]

If you stay with your existing lender, it's unlikely you'll have to pay any LMI if you increase back up to 85%. You would have to pay LMI on the new property, but as Rolf suggested, there's a few lenders waiving the LMI at 85% at the moment.

 

[Mick C]

Hi guys



When my wife and I got our homeloan our loan to valuation ratio (LVR) was around 90% and the lender's mortgage insurance (LMI) was included in the mortgage. However now it's around 75%.

Q1)Is there any advantages now that we are below the 80%? We have our mortgage with commonwealth and its less than 2 years old. Can we ask to have an interest rate reduction?

Q2)If we were to get an investment property and the LVR of both properties came to around 85%. Do we pay LMI again?

Q3) If we want to refinance when does the revaluation of a property happen? How much does it cost usually to refinance including the revaluation.

1. The current bank your with would not lower your rate just because your LVR is less...it's bound to happen thats the whole point of a 30 years loan, eventually goes down to 0

The advantages of a low LVR is you be able to access the equity, swap to a different lender and they will give you a better rate ( new clients only)

2. If it's the same lender then they would most likely waive it. However there are a few lenders who offer NO lmi at 85. and reduce at 95.

3. Refinance- re-valuation can take place BEFORE you submit the loan or right after...either way it needs to be done before the refinance is approved. Cost depends on the lender- but in general
* $250 for valuation ( some lenders IE NAB, pays for this)
* $600 for Application fee ( a few lenders have promotion of NO app fee)
* $400 Mortgage discharge + lender's legal cost
* Break fee/discharge - is any.


Also the Big 3 + some another are offering $500-$800 switching fee towards the cost to break your contract.


Regards
Michael

 

[RealBus]

True in most cases. Some lenders like WBC are now waiving LMI to a max lvrof 85 % for most clients and properties

ta
rolf

Westpac will allow you to lend upto 85% with no LMI this would also allow you to access 10% of your equity to get into a IP. WIN WIN !

 

[jroth]

LMI when refinancing

This thread is similar to a question I've been thinking about recently so hopefully someone will be able to help out my understanding.

For an example scenario where a house was purchased at say $300k at 90% LVR (270k owing) with LMI paid and then over the period of a few years the house were to go up in value to 400k with 270k still owing.

If the loan was then refinanced back up to 90% (270k loan and 90k LOC?), would there be additional LMI to be paid? And if so, how is that worked out - I'm hoping not on the full amount?

Cheers.

 

[Rolf Latham]

Hiya

in MOST cases you would USUALLY only pay on the new portion, that being the 90 k.

Different lenders and lmi providers will have different ways of calculating it, but in general its a lot less than the full premium.

ta
rolf

 

[dubjohnston]

You can get a valuation whenever you want

You can get a revaluation of your property whenever you want. Just ask the bank. Depending on your area your house is will determine the valuation price ($250-$600). If you haven't revalued your house for a while then there is no harm asking if your bank can cover the costs. No doubt that squeaky wheels get the oil.