LMI

Viewing 7 posts - 1 through 7 (of 7 total)

YoungInvestor
Participant
@younginvestor
Join Date: 2003
Post Count: 377
February 29, 2004 - 5:23 pm
Howdy,
I was just wondering how LMI is calculated…?
Obviously there would be no flat fee regardless of the loan size, because it would cost more to insure a 900,000 loan that a 90,000 loan.
So do they work it out on a percentage? (eg: 2% of loan size) Does it vary depending on the institution/insurer? Does it vary depending on the type of loan eg: Standard 25-yr variable loan has different LMI rate to 5-yr I/O in arrs?
Even a link to a previous post or online explanation would be great.
Thanks,
Steve.
“Knowledge is Power”
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 1, 2004 - 12:00 am
It is worked on both the LVR and the loan size.
If you email me the figures I can give you indicative costs.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
woodsman
Member
@woodsman
Join Date: 2004
Post Count: 714
March 1, 2004 - 12:02 am
Steve,
Check this link out – http://www.pmigroup.com.au/calculator.asp
Usually, as a rule of thumb, 1.9% of the loan is the mortgage insurance fee.
James
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 1, 2004 - 12:19 am
Very useful site,
Thanks Georgisj
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
March 1, 2004 - 4:38 am
Don’t forget there are two mortgage insurers, so rates will differ. Also some banks add a little margin on for themselves, so rates may vary between banks. However you coud use the above PMI calculator as a guide.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
robbrown
Member
@robbrown
Join Date: 2003
Post Count: 6
March 4, 2004 - 8:57 am
Regarding LMI, GE and PMI are the main two coys however a guy from PMI said, “some banks cover through offshore insurers” Some banks vary the premium based on whether the loan is PI or IO (more expensive for IO) and some banks charge for 100% of loan where others use a lower percentage.
eg., Have a look at the St. George Handbook.
It always annoys me when some Banks come in with low valuations and then due to lower then expected LVR figures ,guess what they then charge for LMI.
A LICENCE TO PRINT MONEY,Because of the late timing in the finance routine to get a valuation, most people usually end up paying the one off fee.
Even though they may have been attracted to that bank, not which bank, by the lower interest rate or professional discout offer.
COMMENTS PLEASE.
Regards
Rob Brown
CPA/Mortgage Broker
[email protected]
robbrown
Member
@robbrown
Join Date: 2003
Post Count: 6
March 5, 2004 - 4:33 am
correction to above
should read
higher than expected LVR
Regards
Rob Brown