Browse Forums Home Finance 1 Mar 14, 2018 4:14 pm Hope someone can help clear up some confusion for me. I'll be paying LMI on my loan for my build. Its around the 90% LVR. Now I'm trying to keep it below 90% because I can get a much better interest rate that way, above 90% and LMI and interest rate shoots up. Where I get confused though it that when I add up my Land + Construction + All Fees and then take away my deposit I'm at 89.7% However my broker tells me I need to add in the LMI to the loan amount. This then takes me to 91.29%. I just do not understand the logic in this. Shouldn't the % be based on the amount minus LMI and then LMI get added on afterwards. Isn't it an insurance amount because of the amount you are asking to borrow so why should I have to add in the insurance amount first, isn't this just a circular reference? Does this sound right? thanks Re: Lender Mortgage Insurance Question 2Mar 14, 2018 4:37 pm lad2018 Hope someone can help clear up some confusion for me. I'll be paying LMI on my loan for my build. Its around the 90% LVR. Now I'm trying to keep it below 90% because I can get a much better interest rate that way, above 90% and LMI and interest rate shoots up. Where I get confused though it that when I add up my Land + Construction + All Fees and then take away my deposit I'm at 89.7% However my broker tells me I need to add in the LMI to the loan amount. This then takes me to 91.29%. I just do not understand the logic in this. Shouldn't the % be based on the amount minus LMI and then LMI get added on afterwards. Isn't it an insurance amount because of the amount you are asking to borrow so why should I have to add in the insurance amount first, isn't this just a circular reference? Does this sound right? thanks Is the LMI paid as part of the loan? If so, then it is a liability and counted against the debt. Re: Lender Mortgage Insurance Question 3Mar 15, 2018 2:10 pm lad2018 Hope someone can help clear up some confusion for me. I'll be paying LMI on my loan for my build. Its around the 90% LVR. Now I'm trying to keep it below 90% because I can get a much better interest rate that way, above 90% and LMI and interest rate shoots up. Where I get confused though it that when I add up my Land + Construction + All Fees and then take away my deposit I'm at 89.7% However my broker tells me I need to add in the LMI to the loan amount. This then takes me to 91.29%. The LMI is calculated on the base loan which is the amount at 89.7% in your case. If you pay the LMI with cash then the loan amount stays as is and so does the LVR. If you capitalise the LMI onto the loan, then as the broker suggested it will increase your loan amount and therefore your LVR will increase as well. It is then dependent on the lender whether they take this into account for interest rate pricing. Re: Lender Mortgage Insurance Question 4Mar 15, 2018 3:33 pm Ok thanks, seems a little crazy to me. Hate having to pay LMI on a loan I can easily service. I understand the logic your explaining though 😕 This plus the fact that the land has a rebate affecting valuation means I end up with a high LVR 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 4747 Hi, For those whose builder has gone into liquidation. I am trying to find out how the house is insured in the meantime (for the period before you employ a new… 0 2803 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 7935 |