Suncorp $1.5 million LMI

[Roachy]

Hey there,

Just got off the phone to my lender.

They were stating that they/I will need to get an additional LMI insurer since my portfolio is over $1.5 million. Does this sound correct?

And if so,

Do I have to pay LMI for the entirety of the portfolio or just the part which that insurer is looking after?

Sorry if this does not make sense, as it didn't make sense to me.

Regards,

R

 

[Aaron_C]

What were you trying to do? Get a loan increase? Buy another property with Suncorp as a lender?

 

[Rolf Latham]

Concentration risk, and cross collateral maybe

1.5 as primary lender would be right at and sometimes beyond my comfort level for most borrowers and lenders at 80 % lvr

ta
rolf

 

[D.T.]

If you're cross coll itll be lmi on all of it

 

[jonmardell]

That sounds a little strange. If your properties are all crossed then you would pay the lmi on the full debt. If they are not then you only pay lmi on the loan that is going be be in LMI territory. There is no reason why once you your portfolio has hit 1.5 mil that you need LMI it is based on LVR. It is probably time to get a second opinion and if need be restructure the portfolio.

Hey there,

Just got off the phone to my lender.

They were stating that they/I will need to get an additional LMI insurer since my portfolio is over $1.5 million. Does this sound correct?

And if so,

Do I have to pay LMI for the entirety of the portfolio or just the part which that insurer is looking after?

Sorry if this does not make sense, as it didn't make sense to me.

Regards,

R

 

[Rolf Latham]

my guess is there are crossed wires

Sun have a 90 % to1.5 mill DUA with QBE

so what they are saying is they need to REFER the file on to QBE for QBE approval.

FWIW, if you were my client I would have sought alternative funding at 1 mill with a lender that didnt used QBE

ta
rolf

 

[Peter_Tersteeg]

FWIW, if you were my client I would have sought alternative funding at 1 mill with a lender that didnt used QBE

That's pretty much what this comes down to. Trying to borrow more than about $1M under LMI with a single lender is asking for trouble. I'm sure Suncorp is giving great rates, but this is not worth much if they won't let you borrow money to execute your investment strategy.

We've got clients with up to $5M, across multiple properties, all leveraged between 80% and 90%. This is achieved by using about 8 different lenders in a very, very strategic manner and being very, very careful with how the applications are presented.

The challenge at this point is that you start to run out of lenders. The solution is you simply have to resign yourself to lending at 80%.

 

[Roachy]

Thanks everybody for your wisdom.

We are looking to cash out equity and complete a new deal.

Looks good, I think.