Browse Forums Home Finance 1 Jun 03, 2011 4:56 pm how does mortgage insurance work? I am putting 5% down how long will i have to pay this and how do you get rid of it?
Mortgage insurance? 2Jun 03, 2011 5:05 pm Mortgage insurance is a cover for the Bank in the case of you borrowing more then 80% of the purchase price. It is a once off cost normally paid upon settlement. Basically it covers the Bank like this: if you default on your loan the Bank sells the property at a mortgagee auction. That means they don't hang around for the best price. When the hammer drops the bank takes whatever is offered. If there is a difference between the sale amount and your loan the mortgage insurer pays the difference to the Bank. This means your debt with the Bank is cleared. BUT if the amount that the MI paid is greater then your initial premium then the MI company will come after you to pay the difference. The only way around it is either borrow less or have more security like a guarantor to lessen the reliance on the purchase property. Should you sell the place within two years you can sometimes apply for a partial refund of your premium. Some things are worth waiting for. Re: Mortgage insurance? 8Aug 17, 2011 10:52 pm Just wanted to say... I'm really glad you left this post up. I just found it really helpful... Thanks! Building the Drysdale 30 Wallara Waters, Wallan My Blog : http://www.ourwallanhome.blogspot.com My thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=50975 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 7936 I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 53226 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 4748 |