LMI calculator
An LMI calculator can help you understand what type of insurance your lender will request against the mortgage you are applying for. Lenders mortgage insurance calculators are available online and help to provide you with an outline of the type of costs you are likely to be up for when you purchase your property.
So what’s an LMI calculator?
Lenders mortgage insurance is the insurance a lender applies to your mortgage. This insurance helps to mitigate their lending risks when they offer you a mortgage. It typically applies only to high risk applicants and it is calculated at the time of the sale. It can vary between circumstances and individuals and can incur costs running into the thousands.
Am I a high risk applicant?
High risk applicants are generally applicants whose deposit value is less than 20% of their intended property value. Saving for a house deposit is not an easy task, particularly if you are renting. The higher your deposit is, the better your chances of securing a great rate home loan and a very happy lender. However, life is sometimes not that easy and if you are saving for a home in a tough property market then you are less likely to accrue the kind of deposit that will make lending easy for you.
LMI is a way that lenders can offer the applicant/s a mortgage for more than 80% of their intended property value. This insurance allows the lender to recoup some of their costs if the home loan defaults and the property value decreases. If you are willing to pay LMI then you may well find a lender prepared to offer you as much as 95% of the property value when purchasing a house.
Use a simple lenders mortgage insurance calculator to get an idea of what type of insurance levy your lender is likely to ask for when you apply for your home loan. A quick check could potentially save you thousands and helpfully restrict your buying options to a few more suitable properties.
