Thanks for your replies. However, I'm told that if there is a shortfall the financer who has taken possession of the property claims the difference on LMI. Do THEY then come after the poor disposessed 'owner' or is that what the huge premium charged at the start of the loan was meant to cover?
Mortgagee Sale by auction
- Thread starter NewAge
- Start date
Ordinary insurance principles would suggest that the LMI insurer would pay the difference to the bank and then subrogate into the shoes of the bank and pursue the defaulting debtor to recover the difference.
Same way your car insurance works if somebody else prangs your car - your insurer pays you and pursues the person who caused the accident to recover the amount.
Same way your car insurance works if somebody else prangs your car - your insurer pays you and pursues the person who caused the accident to recover the amount.
Oh, and make no mistake that LMI is for the safety and convenience of the lender - not the debtor. I.e, the debtor is not absolved of his ability to pay the loan merely because he paid LMI.
The insurer covers the lender's risk, not the borrower's.
The insurer covers the lender's risk, not the borrower's.
I see a few townhouses out there for 150-200k, but I think you haven't factored in the damages bill.
I also see no point in buying that type of property when you have brick standalone houses in better locations (though not that great) listed for ~250K with much room for improvement & rent increase.
Not much you can do on a townhouse unless it's been trashed inside.
Louise 
read this thread again - there are at least 2 websites mentioned that do exactly that!
read this thread again - there are at least 2 websites mentioned that do exactly that!
