This form of insurance protects the lender if you default on your mortgage, and is usually required if you are borrowing more than 80% of the property value. However, what many buyers don’t realise is that the cost of LMI varies enormously between different lenders.
In fact, it is not unheard of for buyers to save as much as one third of the cost of LMI by shopping around…which is one more good reason to use an independent Mortgage Broker when weighing up different home loans. A good Broker will not only know which lenders are offering the best interest rates, but which lenders will offer you a better deal on LMI…but good luck getting that information from the Banks as a member of the public!
Another factor that can affect LMI is your occupation. In some cases, lenders will consider waiving LMI for some occupations…which is a big saving if you can get it. Another possibility for those who would like to avoid LMI is having your loan guaranteed by a parent.
So as you can see, a bit of “inside knowledge” can go a long way to reducing your costs when you buy a home, so be sure to chat with a Broker before you commit to any loan.
The Barry Plant team can help recommend a finance broker, talk to one of our offices today.