Just after a second opinion here, I have applied to increase one of my existing mortgages and it has been approved but the docs have come out to me with LMI on the whole loan amount not the increased portion. Is there any ‘rules’ with this or is it common for lenders to ‘change their minds’.
I was told that they only charge LMI on the increased amount. It is the same lender, same security properties etc etc.
I have phoned them up to question it but being a long weekend they are now closed till Tues morning, and I just want to be armed with as much ammo as possible on Tuesday when I call them [biggrin]
Any tips?
Cheers!
Dev [cap]
Yep, they should be able to vary the original mortgage insurance contact as long as the loan isn’t too old. It’s probably an oversight.
Cheers
Stu
It is common for mortgage insurance to be charged again on the complete loan amount if you borrow above 80% LVR again. The premium is for the risk associated with lending you money at high LVRs.
What Stuart referred to was a rebate that may apply (discretionary) if the loan is not very old. This usually only applies if the loan has only been in existence for less than one year. Some lenders even have a policy about this.
I think you are confusing mortgage insurance with stamp duty on a mortgage. Stamp duty is only charged on an increased amount in most cases.
Robert Bou-Hamdan
Mortgage Adviser
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