I'm after information in regards to the requirements that Mortgage insurance companies have for applicants. My partner and i only have a 5% deposit and as such would need LMI but have heard their requirements can be stricter than banks/credit unions.
Any information would be greatly appreciated.
Thanks
Loan Mortgage Insurance Requirements
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
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Re: Loan Mortgage Insurance Requirements
Yes that is correct they are far stricter than the banks themselves. You will have to meet LMI policy and pay an LMI premium if you borrow over 80%. Generally they are moderately strict with 85% loans and become almost impossible for 95% loans.
The policies for the main mortgage insurers are extensive and both have 40 page manuals of exactly what they will and will not accept. As a general rule the LMI companies will put on the following extra requirments:
*Clear credit history with no paid or unpaid default.
*Strong employment with a minimum of 12 months in your current jobs or 2 years in the same line of work (there are some exceptions).
*5% of the purchase price in savings held in your account for 3 months or more (there are some exceptions).
*Low level of consumer debts such as car loans and credit cards.
*You must pass a credit score which takes into account everything from your occupation to the suburb you are buying in and many other aspects of your situation.
LMI policies are quite complex so I'd recommend you contact us to discuss your situation and we can let you know if you meet their requirements.
The policies for the main mortgage insurers are extensive and both have 40 page manuals of exactly what they will and will not accept. As a general rule the LMI companies will put on the following extra requirments:
*Clear credit history with no paid or unpaid default.
*Strong employment with a minimum of 12 months in your current jobs or 2 years in the same line of work (there are some exceptions).
*5% of the purchase price in savings held in your account for 3 months or more (there are some exceptions).
*Low level of consumer debts such as car loans and credit cards.
*You must pass a credit score which takes into account everything from your occupation to the suburb you are buying in and many other aspects of your situation.
LMI policies are quite complex so I'd recommend you contact us to discuss your situation and we can let you know if you meet their requirements.