How can I avoid LMI on my home loan altogether?

[Braithwater]

Hi Home Loan Experts.

I'm working as a production manager at Village Roadshow Studios for the last five years. Although my earning can be a bit inconsistent if you look at it monthly, I'm doing pretty good and have consistent numbers yearly. I make $90,000 per year.

I want to buy a property in the range of $600,000 and have almost $35,000 saved up. I tried your LMI calculator and it showed that I'd likely be paying $28,000 max in LMI. It’s too much and I would so much like to avoid it altogether!

[Otto Dargan]

Hi Braithwater. Welcome to the forums.

The cost of Lenders Mortgage Insurance (LMI) varies between different lenders. This LMI calculator is used to compare http://www.homeloanexperts.com.au/mortg ... alculator/ LMI of various lenders and it uses only some of our lenders.

Some lenders provide no LMI home loans and interest rate discounts to entertainment professionals. You can borrow up to 90% of the property value without paying any lenders mortgage insurance.

Please keep in mind that you need to be a high net worth individual and typically earning at least $150,000 per annum to get your LMI waived.

If you can’t be eligible for waived LMI loan, you may qualify for a mortgage insurance discount depending on your loan amount, Loan to Value Ratio and your level of income:

• Loan amount: Since higher loan amounts tend to attract more LMI, save more and borrow less.
• Lower down your LVR: Keep your loan amount to 80% of the property value or the Loan to value Ratio.
• Use a guarantor: LMI is payable when you borrow more than 80% LVR, however, if you have a guarantor, then the premium is waived.
• Genuine savings discounts: More genuine savings allows you to get standard LMI rates which are cheaper than a no genuine savings LMI premium.

Our mortgage brokers will compare premiums from several lenders to ensure you get the lowest possible premium.

Please call us on 1300 889 743 or fill in our enquire online to discover which strategy is right for you to avoid mortgage insurance.

Cheers,

[Braithwater]

Oh, it’s sad to know that my income doesn’t allow me to borrow 90% and get my LMI waived even I qualify as an entertainment professional.

I guess getting a guarantor on board is a promising alternative. I may have to speak with my aunt about this. She owns a property. Hope she’ll be accepted as a guarantor, will she?

[Otto Dargan]

Hi Braithwater,

Yes, some banks will consider your aunt as a guarantor for your home loan. They can consider guarantees from immediate family members such as siblings, grandparents, spouses, de facto partners or adult children.

In most cases, banks will only allow parental guarantees i.e. a guarantee from the borrower’s parents.

However, almost all lenders prefer that they have sufficient equity in their property, i.e. owe less than 80% of the property value and guarantor should be working at the moment.

Having a guarantor for your home loan to buy a property, you can not only avoid mortgage insurance but you can borrow up to 105% of the property value which includes the costs of completing the purchase.

Please give us a call on [b]1300 889 743[b] or complete our free assessment form to find out if you and your guarantor qualify for no LMI home loan.

Cheers,

[Braithwater]

Wow, thanks for the information. She’s working currently, so shouldn’t be an issue. I’ll speak with her and call you guys in the coming week. Bye.