Maximum Loan with LMI

[buzzlightyear]

Do banks or mortgage insurers impose a maximum amount for a specific loan which requires LMI or do they (bank or MI's) look at your total LMI exposure across all loan commitments before approving?

Looking at a potential purchase of around $600k, which I would be looking at a 90% lend (capitalised), so not sure if my options are limited.

Are there any traps for your players that I should be aware of, for lends of this amount and high LVR?

 

[Kristine..]

Hi Buzz

The answer is, it depends.

If you are staying with the same lender / mortgage insurer, then both parties will have a say in the matter. You will be subject to a maximum loan / maximum lend cap from the lender and from the insurer.

If you are applying for the new funds from a different lender which uses a different mortgage insurer, then all that the new lender / insurer will be considering is overall serviceability.


However, having said that, at 90%LVR you are under the radar for the real number crunching, whereas if you were looking for a 100% lend you may find that the limit could be as low as $650,000 for new borrowings.

Hope this helps

Kristine

 

[Lia Hayes]

Hey Buzz,

It is always worth asking the question as to which MI the lender is going through as far as looking at possible exposure limits in the future.

Several lenders use two (or three) MI who they can go through, giving you the option of spreading your exposure around, but on the flip side, it pays to ask the question in case they have put you with one MI when you assumed you were going with another.

 

[buzzlightyear]

Thanks for the responses.

Westpac seems to be the bank most likely at this stage and as I understand, they are self-insured. Serviceability now is the next challenge...

 

[Lia Hayes]

Yes, they are.

 

[Rolf Latham]

Hiya

Westpac are self insured, BUT do re insure their book through GE.

In general, single deals below 750 wont come up on the GE file radar, but in recent times we have had some scares where the higher level of sign off with WLMI is outside if westpac and the file may be recorded as exposure.

Another good reason to avoid the cross coll monkey

ta
rolf