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LMI or lenders mortgage insurance is something that is often heard of in relation to home loans. But many people don’t know what this kind of insurance is actually for, or who it protects. So what exactly is lenders mortgage insurance?
What is LMI?
LMI stands for lenders mortgage insurance. This is a type of insurance policy that borrowers can take out when they get a home loan. Insurers pay out the LMI benefit if a borrower defaults on their loan.
Contrary to popular belief, the lenders mortgage insurance benefit does not go to the borrower. It is actually paid out to the lender. The purpose of this kind of insurance is to protect lenders in the case of borrowers failing to make their mortgage repayments.
Who needs lenders mortgage insurance?
Borrowers have to get lenders mortgage insurance if their deposit isn’t big enough. For example, if you have less than a 20% deposit, you’ll need LMI. The cost of the policy will vary. The price of the property, the size of the loan, the size of the deposit, and other factors all affect how much LMI you will need to pay.
Finding out more about how LMI affects you
If you’d like an assessment of whether you need lenders mortgage insurance, and how much your premium would be, get in touch with Bee Finance Savvy.
Our super helpful broker Desiree is ready to answer all your questions about lenders mortgage insurance, and how it affects you. We provide obligation free assessments so that our clients can find out what their options are, and how to move forward.
If you’d like to hear from just some of our satisfied customers, take a look at our reviews on WOMO https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda
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