Mortgage insurance

From: Patrick Bruadair

I have a question on Lenders Mortgage Insurance. I have an outstanding loan balance of $235,000 on my home (value $490,000) and am planning on getting a loan of $315,000 for an IP+costs (IP valuation $300,000)i.e. total loan = $550,000, total valuation = $790,000, LVR is about 70%. Later I would like to refinance to an LVR of 90% (i.e. borrow $710,000)to make more equity available for other IPs. Is it true that Mortgage Insurers will only go up to a total loan value of $500,000?


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Reply: 1
From: Rolf Latham

Hi Pat

Generally one lender will get cold feet at 500 k.

One of the options is to use two lenders.

I would highly recommend that you do not go down the track you are headed - warning warning you are about to get bundled up, with cross collateralised properties and pay LMI on the whole lot - not needed.

Instead, either refinance your exist home loan, and add an investment split to a total of 80 % of the value of your home, so you can borrow 392 out of your home without LMI. This leaves 392-235 for = 157 for IP deposits and costs.

Then take an 80 or 90 % loan with the IP as a totally separate loan structure, and iuse the money from the above 157 loan as dpeosit and for costs.

PLease seek the services of an independent mortgage broker. A good one will save you so much time and hassle (and likely lots of money as well)


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