No LMI Home Loans
For many people, saving for a deposit on a house is difficult enough when you’re also paying rent, subtracting living expenses and trying to pull money together for the additional costs associated with buying a property.
So for homebuyers who aren’t able to produce 20% of the property value upfront, the thought of paying insurance on top of mortgage repayments and interest isn’t particularly appealing. Thankfully, there are ways to secure a home loan without paying LMI.
What is Lenders Mortgage Insurance (LMI)?
Lenders Mortgage Insurance is insurance that protects the lender in the event that you (the borrower) default on your home loan. This is generally required if you are borrowing more than 80% of the property value, as it removes any risk that the lender will lose the funds they loaned you to purchase the property.
It goes without saying that no one wants to pay LMI on top of their repayments and interest on the loan, so what options are available for avoiding paying LMI?
No LMI home loans explained
A no LMI home loan allows homebuyers to take out a loan for more than 80% of a home’s value (up to 95% in some cases) without needing to pay LMI. The advantages of this are obvious – suddenly you can save thousands of dollars in insurance, and instead put this money towards other costs associated with buying a home (such as stamp duty and renovation costs, for example).
There are a few no LMI home loan products available from different lenders, and the eligibility criteria varies from lender to lender. Typically though, eligibility for no LMI home loans includes:
- Borrowing less than $1 million
- Buying an established property in a metropolitan area
- Good credit rating
- Stable employment
Many lenders waive LMI on the basis that you work in one of the following professions: accounting, law, engineering, medical professionals and veterinarian services.
Are you eligible for a no LMI home loan? Find out with BFG Loans
Applying for a no LMI home loan can be overwhelming – there are more hoops to jump through than a standard mortgage. Thankfully, BFG Loans’ qualified and experienced brokers know where to look for the most suitable options from reputable lenders, and we can guide you through every step of the process.
Not only will we help you secure the ideal no LMI home loan from our panel of over 35 reputable lenders, but once everything is done and dusted, you won’t be the only person to find a new home. At BFG Loans, we invest 50% of all profits in creating affordable housing for families who are in need – a home for a home.