Hello
Im currently looking to switch the mortgage for an investment property from PI to IO. My lender has now told me i will have to pay mortgage insurance again. Im told the reason behind this is because with the valuation staying the same as what the purchase price was three and a half years plus what i have paid off doesn’t cover the 20% needed to not qualify for mortgage insurance. They are classing this as a whole new loan. Ive never heard of this before and it has blind sided me. Ive paid it once and won’t get a refund on the mortgage insurance I’ve already paid. Is this the norm in this situation?
Regards
Sam W
Hi Sam
Seems a bit weird.
Is this Anz?
You’ve got a couple of options. Speak with a decent finance person and look at the option of staying with your current lender and the costs involved and ordering a couple of upfront valuations with different lenders and refinancing.
There’s pros/cons of both approaches.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie
The loan is through NAB. They are asking for around $500. In regards to refinancing and external valuations, wouldn’t the money they are asking for quickly get eaten up by these other avenues?
Regards
Sam W
Have you thought about getting a couple more upfront vals with different lenders to see if you can get a better result?
Admittedly there are fees with refinancing (prob higher than the $500 in LMI you’re up for) but if you get a better result you might also be able to pull out some equity whilst converting it to IO (that’s if you’re wanting to do so). Some banks are providing cash backs for refinancing too.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Has the property declined in value since the purchase? For LMI to be liable on a refinance in that scenario the LVR would need to have increased and or $ value of the loan in the meantime.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
If the loan term is the same and not being extended then there should be no additional LMI.
Get your NAB Banker to give you a written explanation before proceeding.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
The properties value has stayed the same according to the banks valuation. I will ask for the explanation in writing before i proceed any further. Thank you all for your input.
Sam
Something definitely doesn’t stack up. It’ll be interesting to see what the banker comes back with.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Evening all
Well after requesting an explanation in writing they came back and told me that since our last payment went through we now have the required 20% and no longer will need to pay mortgage insurance. Seems incredible convenient of them. I had a gut feeling if i pushed this issue it would go away.
Regards
Sam
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