What is Lenders Mortgage insurance (LMI)?
Mortgage insurance gives protection to lenders in the event a payment obligation is not met. You as the borrower are still liable to pay the outstanding monies but this LMI can be taken out where insufficient deposit is available for the lenders criteria, but where you still wish to have the loan. This covers the mortgage lender’s risk. What kind of documentation will I need to provide for verification? This depends on the type of loan and complexity of your personal situation. Your Personalised Finance manager will guide you through the process of identifying and gathering the relevant information required and applying for the loan, saving you time, money and hassle. Can I apply for a purchase loan before I find a property? Yes! In fact if you are in the process of looking for a property we recommend that you apply for pre-approval. A pre-approval will review your financial situation to determine if you are likely to qualify based on the estimated loan amount and purchase price inform
A. LMI protects lenders against loss should a borrower default on their loan. If the security property is required to be sold as a result of the default, the funds received from the sale may not cover the full balance outstanding on the loan. In this scenario, the lender is entitled to make an insurance claim to the LMI provider for the reimbursement of any amount outstanding, subject to the terms and conditions of the LMI Master Policy. LMI should not be confused with Home Insurance, or Loan Protection Insurance, which covers the borrower in the event of sickness, unemployment, disability, or death.
