Mortgage Insurance



From: Matt Cho

I have just purchased a house to live in
and I am trying to decide how to structure
the borrowings. I can go 95% LVR and
pay LMI -ouch! Or I can go 80, 85 etc.
As yet I don't have any IP's but I have been
'learning the game' for a few years and
intend to start buying for that purpose
soon. So looking at the bigger picture do
you think that it's sensible to wear the
cost of the LMI approx 5.5K and keep my
cash nice and warm reducing the interest
on my home loan and draw it down for the
dep. on an IP later......or not!
Reg Matt
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Reply: 1
From: Rolf Latham

Hi Matt

Accesible equity or cash is king.

LMI is good stuff. It commonly allows you to hold 60 to 70 % more property than without.

Use a lender that will allow you to capitalise the LMI premium, for eg ANZ, Suncorp, Bankwest.

Go for a 100 % offset acct product for at least part of your home loan and park your spare cash in that until such time that you are ready to buy your IP.


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Reply: 1.1
From: J Parker

Sorry Rolf but what do you mean by capitalizing the LMI premium? I am lost....:)

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Reply: 1.1.1
From: Joanna K

Hi Jacque,

To capitalise the LMI or even the Interest is to include it in the amount being borrowed. You will be borrowing the LMI so you don't have to fork it out of your savings.

Hope this helps!

Kind regards

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