Browse Forums Home Finance 1 Apr 13, 2009 4:08 pm Hi all, We're about to build a house and our home loan has been pre-approved with CBA. Our loan will be a maximum of $350K for the construction and the land. We're FHB and concerned about the mortgage insurance required. I understand that CBA use Genworth as their mortgage insurer, but I'm yet to find the answer for the following two questions. I see that Westpac only requires mortgage insurance for loans above $450K, so why do CBA charge you for it regardless of how much you loan is ? The second question is about the FHBG. Do mortgage insurers take into consideration the FHBG ? I asked my broker and he said that they don't !! It doesn't really make any sense !! Thanks P.S. We're paying %10 of the home loan, and 15% including the FHBG. Re: Mortgage Insurance with CBA 2Apr 13, 2009 4:43 pm Both banks charge LMI for loans that are more than 80% of the property value, regardless of the loan amount. Last year both banks could lend up to 85% with no LMI if you were a strong customer however this is now a thing of the past thanks to our friends in America not paying their loans. Note that CBA has recently started charging a risk fee instead of using genworth for some loans. The fee they charge is equivilent to LMI from Genworth so there is no major difference. Your broker should shop around for you as LMI varies significantly between lenders. In particular if you have "saved" your deposit and can prove it by bank statements for 3 months showing regular savings then you can get cheaper LMI with some lenders. This genuine savings policy is quite complex as in some cases banks will accept rent you have been paying as genuine savings because it is a good indication that you can pay back a loan. Everyone shops around for a good rate however nobody really compares LMI premiums because lenders rarely tell you their premium rates. Mortgage brokers have access to lenders LMI premiums and should take this into account when recommending a loan for you. Because I don't know your full situation I can't really comment as to if your broker has given you the best advice. A few handy hints for getting cheaper LMI: * Lenders charge cheaper premiums for smaller loans. The premiums jump up significantly when you go over $300,000 & $500,000. * Lenders charge cheaper premiums if you are borrowing a smaller % of the property value. The premiums jump up significantly if you borrow over 90% or 95% (very difficult these days). * If you have been paying rent for the last 12 months OR have 5% of the property value saved in a bank account then you may be eligible for cheaper LMI premiums. * If you borrow less than 80% you generally pay no LMI at all. * LMI varies significantly between lenders. Two of the major banks charge around 20% - 40% more than most other lenders which can work out to be many thousands of dollars. * Some lenders have slightly cheaper LMI premiums available to first home buyers. Re: Mortgage Insurance with CBA 3Apr 13, 2009 5:40 pm iTalk I see that Westpac only requires mortgage insurance for loans above $450K, so why do CBA charge you for it regardless of how much you loan is ? Someone's been telling you porkies mate. I hope it wasn't a wetprat employee. Hi there, long-time lurker but first time posting. I've bought a house 2 and a bit years ago and last year we had some major water damage on a converted pergola area… 0 7929 I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 53198 i would not be signing anything on the day read your contract about when builder submits final invoice generally, have to meet builder within 7 days of receiving final… 1 4735 |