What Is LMI
Lenders Mortgage Insurance (LMI) is one way of getting into homeownership without having the 20% deposit. Most lenders require at least a 20% deposit without LMI.
With Lenders Mortgage Insurance, lenders may allow you to borrow a higher proportion of the purchase price even up to 95% of the security value. This will allow you to purchase a property, with a smaller deposit, at the same or similar interest rates as loans with a higher deposit amount.
Lenders Mortgage Insurance should not be mistaken for Mortgage Protection Insurance. Mortgage Protection Insurance only covers your mortgage in the event of death, sickness, unemployment or disability. Lenders Mortgage Insurance or LMI, protects your lender against a loss, should you, as a borrower, default on your home loan. The Mortgage Insurer may seek recovery from the borrower, or any guarantor, for any shortfall amount if the sale of the property was not sufficient to cover the loan and fees.
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