The basics of buying a property
Almost everyone wants to be able to buy a home sooner rather than later, however saving the standard 20% deposit can sometimes be a truly daunting prospect - and one that not a lot of borrowers can comfortably achieve by the time they wish to purchase.
Let's face it - with median house prices in Australia now above $500,000 saving a deposit of as much as $100,000 can be an impossible task.
By reducing the lender's risk at the outset, taking out Lenders Mortgage Insurance allows you to purchase your dream home with as little as 5% of the purchase price. This can open up many possibilities for you as a new homebuyer - better location, larger house, ability to do renovations - simply put, Lenders Mortgage Insurance brings you that much closer to achieving your home ownership dreams, years earlier than you ever thought possible.
Whether you are purchasing your own home or an investment property, using Lenders Mortgage Insurance can help you to achieve these goals much earlier and get you building your personal equity sooner. Click here to find out more
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance is one of the ways to achieve the dream of home ownership sooner for borrowers that do not have a large deposit.
Most banks and financial institutions require you to contribute a deposit based on a percentage of the purchase price of your property. With Lenders Mortgage Insurance, lenders may allow you to borrow a higher portion of the purchase price, allowing you to purchase a property sooner and with a smaller deposit than would otherwise be required.
Lenders Mortgage Insurance should not be mistaken for Mortgage Protection Insurance, which covers your mortgage in the event of death, sickness, unemployment or disability. Lenders Mortgage Insurance protects your lender against a loss should you as a borrower default on your home loan. If the security property is required to be sold as a result of the default, the net proceeds of the sale may not always cover the full balance outstanding on the loan. Should this be the case, your lender is entitled to make an insurance claim to Genworth for the reimbursement of any shortfall. Where a claim for loss is paid to a lender, Genworth may seek recovery from the borrower, or any guarantor, for any shortfall amount.
About the Lenders Mortgage Insurance (LMI) Calculator
Depending on your lender's requirements, Lenders Mortgage Insurance allows you to
borrow up to 95% of the purchase price of your home, with a lower deposit than is
Traditionally, lenders require borrowers to have at least a 20% deposit. However
by using Lenders Mortgage Insurance, lenders are able to offer lower deposit home
loans. Lenders Mortgage Insurance protects the lender if a borrower is unable to
meet their mortgage repayments and the property has to be sold.
If the proceeds from the sale of the property are insufficient to cover the outstanding
loan balance and other costs incurred by your lender in relation to enforcing the
mortgage, the lender is able to claim any shortfall from Genworth calculated in
accordance with the terms of the insurance policy.
Note: Lenders Mortgage Insurance should not be mistaken for Mortgage Protection
Insurance, which covers your mortgage repayments in the event of death, sickness,
unemployment or disability.
This mortgage insurance calculator provides an estimate only. The results of the premium estimator
should be used as an indication only and are based on the information provided.
An estimate is not a premium quote from any Lenders Mortgage Insurance provider.
Provision of an estimate is not an indication that any Lenders Mortgage Insurance
provider has approved the Lenders Mortgage Insurance risk. The ultimate premium
payable for Lenders Mortgage Insurance may differ from the estimate provided for
a number of reasons, including the personal circumstances of the borrower, the type
of loan product selected and the type and location of the security property.