Understanding Waived LMI
Lenders Mortgage Insurance (LMI) is typically required when a borrower has a deposit of less than 20% of the property’s value. This insurance protects lenders in case the borrower defaults on their mortgage. However, there are opportunities for eligible borrowers to secure home loans with waived LMI, significantly reducing the upfront costs associated with purchasing a home.
What are LMI Waived Loans?
LMI waived loans are specialised home loans that allow borrowers to avoid paying Lenders Mortgage Insurance. These loans are designed for certain professionals and first-time home buyers, enabling them to secure a mortgage with a lower deposit, often as little as 10%, without the additional cost of LMI. This can result in substantial savings and make the path to home ownership smoother and more financially manageable.
Benefits of LMI Waived Loans
Cost Savings
One of the most significant advantages of LMI waived loans is the potential for considerable cost savings. LMI can add thousands of dollars to your home loan costs, especially if you have a smaller deposit. By securing an LMI waiver, you can avoid this expense entirely, allowing you to allocate more of your funds towards your property purchase or other financial goals.
Accessibility
LMI waived loans make home ownership more accessible to a broader range of borrowers, including various professionals such as healthcare workers, lawyers, accountants, and engineers. These loans are also beneficial for first home buyers who may not have the substantial savings required for a large deposit. By reducing the upfront costs, LMI waived loans provide an easier entry into the housing market.
Higher Borrowing Capacity
With LMI waived loans, you can often borrow a higher percentage of your property’s value without the added insurance cost. This increased borrowing capacity can be particularly beneficial for first home buyers or those looking to invest in a higher-value property. It enables you to enter the property market sooner and with greater purchasing power.
Financial Flexibility
By avoiding LMI costs, you gain greater financial flexibility. The savings can be used to cover other expenses related to buying a home, such as stamp duty, legal fees, and moving costs. Alternatively, you can use the extra funds to invest in home improvements or to maintain a healthy savings buffer for future financial security.
Who Qualifies for an LMI Waiver? Lenders often waive LMI for the following groups:
High-earning professionals
Doctors, accountants, lawyers, engineers, and veterinarians are often eligible for LMI waivers due to their stable income and lower default risk.
Investors in Defence Housing Australia (DHA) properties
These individuals can receive 90% home loans with waived LMI.
First home buyers with a guarantor
These buyers can borrow up to 105% of the purchase price without incurring LMI.
At PLS, we specialise in helping eligible Australian professionals secure LMI waived loans, significantly reducing the upfront costs associated with buying a home. Whether you’re a first home buyer or a seasoned investor, our personalised loan options can make home ownership more accessible and affordable. Discover how our LMI waived loans can help you achieve your property goals with ease and confidence.