If you don’t have a six-figure deposit saved or a decent chunk of equity in your existing home loan, there’s a good chance you’ll need to pay lender’s mortgage insurance (LMI).
Unless you work in an industry that qualifies for an LMI waiver, that is.
What’s an LMI waiver? It’s a financial win that could see you own your own home (or refinance your existing loan) without having to pay this insurance premium.
Essentially, your lender gives you an exemption from paying LMI because they recognise that you work in a safe, secure and high-paying industry that is likely to keep you in reliable employment for many years to come.
This has become even more important following the pandemic, as these industries are almost considered “recession-proof”.
So which professions qualify for reduced or waived LMI?
Lender’s mortgage insurance is an expense a lot of borrowers have to pay when they take out a home loan. It applies to any loan when your deposit is less than 20% and it acts as a guarantee to the lender that they’ll still get paid, even if you stop repaying your home loan.
LMI cops a lot of flack because it’s so expensive, but the reality is, without LMI, many home buyers would be waiting years (or even decades) to save enough of a deposit to enter the property market.
For instance, if you’re buying a home for $800,000 and you have an $80,000 deposit, you have a 10% deposit and will be required to pay LMI – a premium that can range from a few thousand dollars to $25,000+. This amount can be paid upfront, or you may be able to add it to your loan to pay it off over time.
How much money could you save with an LMI waiver?
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