If I buy a house with 5% deposit and I sell it in 9 months, will I get a partial refund on the LMI that I paid? and if so how much would I get back? lets say the house was $400k and the LMI paid was $10k
And if some banks PMI do not pay back any LMI then which banks PMI pay back some of the LMI and which is the highest???
I have never heard of a refund for LMI.
There are now 2 main mortgage insurers, QBE and Genworth.
Whether you can get any back and how much will depend on the bank and the insurer's policies. You may be able to get back up to 20% to 40% of the premium if the loan is discharged in the first year.
It generally nothing will be paid:
– unless requested
– if the loan has been in default or arrears
– if the amount is small, less than $500Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry pretty much covered it.
LMI refund is possible and it happens; especially if the loan is discharged in the 1st year. It will be written in your loan docs and most of the major 4 banks allow prem refund; however it is case by case…if in doubt aks your broker/banker.
Straight from Genworth”
No refund is payable where:
separate arrangements are in place with the lender for a reduced premium rate in lieu of taking premium refunds.
the loan is repaid within one year of the maturity date of the mortgage; or
the notification of cancellation of the policy is received by Genworth more than 3 months after repayment of the insured loan; or
the refund amount is less than $150.00; or
a loss has eventuated; or
the loan has been reported to Genworth to have had arrears.PERIOD FROM DATE OF PREMIUM PAYMENT TO DATE WHEN LOAN HAS BEEN REPAID IN FULL REFUND PAYABLE*
1 year or less 40%
Over 1 year to 2 years 20%http://www.genworth.com.au/lender-resource-centre/policy-and-product-information/cancellations/
QBE refund form- http://www.qbelmi.com/Uploads/Documents/925eb114-882d-48b9-a95e-3bc98b9c57b7.pdf
—-
When i submitted refund form for client i find Genworth is much more easier to deal with and ask less questions + less requirement. However QBE do give a much higher refund amount back- 30-60% back.
Note: AMP has the worst refund policy out of the banks that i have seen….
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I should add that a broker would have to give back all of his upfront commission if you discharge the loan within 12 months.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks everyone
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