18 Sep What is LMI?
Lenders mortgage insurance (LMI) is an insurance required by borrowers to take out if they have less than 20% deposit for a home they wish to purchase. This means that achieving the dream of homeownership with a small deposit is possible.
LMI is paid by the borrower, so that if you default (miss a payment due date), the insurance covers the lender (not you as the borrower), for any difference if the property is sold for less than the outstanding amount on the loan. After the property is sold, you’ll be required to pay the same amount to the mortgage insurer, despite the fact that the lender has been covered for their loss.
Borrowers can pay for Lenders Mortgage Insurance upfront, or it can be capitalised into your home loan.
Lenders Mortgage Insurance should not be mistaken for ‘Mortgage Protection Insurance’, which covers your mortgage repayments in the event of death, illness, unemployment or disability.
If you have any questions about obtaining a home loan, contact Pulp Finance on 1300 506 998 or email@example.com
Your full financial situation would need to be reviewed prior to acceptance of any offer or product.
Credit Representative 508672 is authorised under Australian Credit Licence 389328