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For the loan to purchase our home we borrowed about 90% and had to pay mortgage insurance. If we refinance does it mean we have to pay it again?
Responses
Hi Mark
If you refinance to another lender and your debt level is above 80% of that banks valuation of your property, then yes - you will.
If you refinance and the debt is under that 80% mark, there will be no LMI implications.
It's worthwhile noting that on occasion, topping up your loan to access any equity may be best to do with the existing provider, as you should get some rebate on the LMI already paid. Subject to, initial LVR, new LVR and original and new LMI premiums.
Hope this helps.
Ben Slater
Aussie Unley
Hi Mark,
Great question. The general rule of thumb is that if you want to take the borrowing back up to 90% & refinance with another lender you will be expected to pay the mortgage insurance again.
Can I ask what the purpose of refinancing would be?
If it's just to release the equity that you have acquired in the property since purchasing then perhaps you can stay with the same lender & just release the equity. You would still need to pay mortgage insurance but it would be just on the additional equity.
If you are looking to refinance to improve the rate then maybe a chat to your existing lender might help & see what they can offer.
I hope the above is of assistance.
Happy to talk further offline if you wish.
Have an awesome day.
Rebecca A Mitchell
Awesome Lending Solutions
Hi Mark,
Thanks for the question and using simplyaskit.
Well I think the previous respondents have answered your question pretty well.
If you purchased your home a while ago, the property may have gone up in value, particularly in your area, so yes there would more than likely be a updated valuation done by the bank you are looking to refinance to.
So depending on that valuation, mortgage insurance may be payable again if the loan amount refinanced is above 80% of the valuation.
Really happy to discuss your situation further if you wish Mark, so please feel free to contact me.
Regards
Craig
0499 841717
KeyInvest Lending Services Norwood
Hi Ben, thanks for the advice. How can we find out what the valuation is so we can work out what to do?
Regards Mark
Hi Mark
Not a problem.
Each individual bank will use only a valuation it orders/commissions.
Have you got a bank in mind you'd like to switch to?
I'd be happy to discuss further with you over the phone.
If there's a superior option you like elsewhere and I can assist with that lender, I can order a valuation for you. It will not cost you anything.
Regards,
Ben Slater
Aussie Unley
0499773743
Thanks Ben, I am going to give the bank a call and see what they offer. If they don’t do anything I will let you know… thanks for taking the time
Mark
No problem, Mark.
My details are available if you open my profile.
All the best.