Finance Broker Australia Home Loan Broker

Lenders Mortgage Insurance, often referred to as LMI, is an insurance policy a bank or lender requires a borrower to pay to cover the home loan if the risk of a home loan exceeds the lenders credit policy.

Mortgage insurance premiums in Australian lending are a one off cost payable at the time of home loan settlement by the borrower.

The mortgage insurance premium is an insurance cover for the lender if there is ever a loss as a result of the home loan not being repaid.

Deposit for a home purchase can be made up of three different stages.

• The total available deposit available to contribute toward the purchase.
• The holding deposit usually payable when an offer is accepted but prior to the contracts of sale being signed and exchanged.
• The 5 or 10 percent deposit usually payable following exchange of contracts for sale.

When there is only a limited deposit available a 5 or 10 percent deposit requirement can usually be avoided by obtaining a deposit bond or deposit guarantee.