Hi, just a couple of questions regarding mortgage insurance.
Is mortgage insurance a one off payment only?
As if you own a house for $100k, you paid 10k deposit, after 2 years you have paid off another 30k, can you re-draw back up to your limit (90%) for a deposit on an IP, and not have to pay mortgage insurance again?
If so can you do this a couple of times?Does it differ if you are doing this on an IP? Say a LOC set up for 90% (already paid mortgage insurance), can you re-draw back up to that set amount at any time for deposits on further IP’s?
As I’m weighing up the options of paying mortgage insurance and getting into the market sooner, or waiting till I have the 20% deposit and therefore paying a bit extra for the IP, as had to wait a bit longer to purchase.
Cheers.
Hi, just a couple of questions regarding mortgage insurance.Is mortgage insurance a one off payment only?
Yes, it can be added to the loan.As if you own a house for $100k, you paid 10k deposit, after 2 years you have paid off another 30k, can you re-draw back up to your limit (90%) for a deposit on an IP, and not have to pay mortgage insurance again?
Yes, if you change the loan they will have to change the mortgage insurance contract. If you stay with the same lender they might be able to do a variation (so you only pay the price differential.
If so can you do this a couple of times?Does it differ if you are doing this on an IP? Say a LOC set up for 90% (already paid mortgage insurance), can you re-draw back up to that set amount at any time for deposits on further IP’s?
Yes, you can redraw back up to the dollar limit only (i.e. you cannot draw up to 90%).As I’m weighing up the options of paying mortgage insurance and getting into the market sooner, or waiting till I have the 20% deposit and therefore paying a bit extra for the IP, as had to wait a bit longer to purchase.
For the pros and cons of this see – http://www.prosolution.com.au/gear.pdfCheers
Stu
Hi MJJ,
To mortgage insurance or not – that is the question.
For us we initially used mortgage insurance so that we could stretch our available equity (the same issue applies with deposit savings) as far as we felt comfortable doing so.
This allowed us to buy additional properties ahead of time and as such was particularly beneficial for us.
Now we have equity to spare and as such do not envisage using LMI in the short term future as there is no need to do so.
On a related matter LMI is a deductible expenses over five years (20% of premium/annum) or the life of the loan – whichever is sooner.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks guys, I will say I will need to use it to get the IP I want.
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