Westpac to stop 85% no LMI on re-finance

[Maverik]

Latest broker update.

A recent review of our 85% no-MI policy has identified that loans requiring a mortgage insurance waiver which involve a refinance are a high risk segment within the mortgage portfolio.

As such, effective 27 September 2008, new loan applications & Top-ups that include an external debt refinance, an internal debt refinance or that increases the current mortgage exposure, will no longer be eligible for the mortgage insurance waiver option between 80 - 85% LVR. However, for an internal debt refinance that does not increase the current mortgage exposure, Credit will consider an override of the mortgage insurance requirement to 80 - 85% LVR subject to supporting comments.

Pipeline applications (including Pre-Approvals) and Top-up loans created prior to 27 September 2008 which involve a refinance, will remain eligible for the mortgage insurance waiver option.

 

[Peter_Tersteeg]

This is confirmed, but it's a pain in the neck...

I wonder if they've assessed their risk and correlated the end use of any 'cash out' to the level of defaults.

I imagine the level of defaults where extra money was used for personal purposes would be substantially higher than that used for investment purposes.

 

[Rolf Latham]

Hiya

The rumous have been around for a while

As always, one cant but be cynical.

LMI wont stop the arrears on an 85 or higher lend, soooooooooooooo wed suspect that its nice to get some extra revenue in the form of LMI. Bad news for WBC is thats why they have been getting decent volumes..............

With RAMS getting WLMI to help them out, one cant but think these events are related ............

ta
rolf'

 

[eggnog]

ohhhhh ****. Just applied to get proeprty revalued to establish a LOC with 85% no LMI. Since I applied for this before the deadline will I still be able to scrape through.

 

[Maverik]

ohhhhh ****. Just applied to get proeprty revalued to establish a LOC with 85% no LMI. Since I applied for this before the deadline will I still be able to scrape through.

Bottom paragraph. Check with your broker that your loan is in the system and at the stage Westpac define so.

 

[bazza52]

Bugger, that was an excellent product. ING had a similar one, does anyone know if that is still available?

 

[Peter_Tersteeg]

ING has a system where they don't require LMI if you qualify for it, it's called REF (Reduced Equity Fee). At 85% there is a flat rate charge of $399.

Beyond 85% the charges are higher and determined as a % of the loan amount, but it is cheaper than LMI.