Re: Understanding mortgage broker calculations?2
Jul 10, 2018 7:21 pm
Re: Understanding mortgage broker calculations?3
Jul 10, 2018 9:11 pm
On the figures provided there, the net proceeds of borrowing (i,e. what goes towards paying for the house) is $296K. On top of that, there's an 'extra' $7.7K added on to the loan for Lender's Mortgage Insurance, which means you're borrowing $303.7K to pay for $296K of house. Think of the LMI charge as an extra fee for having a deposit of less than 20%.
Note also that "Lender's Mortgage Insurance" protects the lender, NOT you, in the event of default. So really, you're having to borrow extra money (and pay the extra interest etc.) to pay for somebody else's insurance. Unfortunately, that's how it works.
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