Do most people have to get morgage insurance for their 1st house??or should i save enough money up first so i dont need it
Generally if you are borrowing => 90% of the value of the property you have to get mortgage insurance. It all depends on the lending institution.
Whether or not to get mortgage insurance is a personal matter I think. Obviously if you have a larger deposit and thus don’t have to incur LMI costs this is better. Sometimes though saving up the extra deposit money will take too long. All up LMI is a rather small amount compared to the whole transaction
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Jam for the Great I Am!
Yes, it can be race between how fast you can save and how fast the market is moving.Yep, I think what Jazz & Michael have just said hit it on the head.
If the market moves faster than you can save – go for the loan now regardless of whether you need to pay LMI. But then, its up to you in the end whether you want to do that.
Most loans above 80% require the borrower to pay LMI and the amount varies by lender, loan size and LVR. To be on the safe side assume about 1.3% of the loan value, ie $1,300 per $100K loan, and as the other guys have said – it isn’t huge compared to potential gains so if the deal stacks up, do it!
There are lenders out there who will lend up to 100% with minimum 3 months genuine savings, eg St George, but you pay a penalty higher rate. Then there are lenders like ANZ and Suncorp who will lend 95% AND capitalise LMI, ie stick it on top of the loan amount, then there’s the rest of the crowd who’ll lend 95% and you pick up the tab for LMI at approx rate above.
Happy investing,
Mel
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]i seem to think in my own heade if i keep putting it off when will it happen i want out of this rat race so i will pay MI and be done with it thanks heaps for all your replys you are all my idols[
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