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Waived LMI And No LMI

What Does LMI Waiver Mean?

lenders mortgage insurance

In the typical property buying process, borrowers are required to pay Lenders Mortgage Insurance (LMI) when their loan amount exceeds 80% of the property value. However, for certain high-earning professionals, lenders may offer an LMI waiver, eliminating the need for LMI. For instance, if you’re purchasing a $1 million property, this LMI waiver can lead to substantial savings by exempting you from LMI costs, potentially amounting to thousands of dollars.

Who Qualifies For LMI Waiver?

Waived Lenders Mortgage Insurance (LMI) is available from certain lenders to the following groups:

  1. Specific professionals, such as doctors, accountants, and lawyers.
  2. Investors in Defence Housing Australia (DHA) properties.
  3. First home buyers using a guarantor can borrow up to 105% without LMI.1
  4. Home buyers seeking to borrow over 80% of the property value (subject to lender conditions).

To be eligible for LMI waiver, you must meet the following requirements

For Doctors:

  • Maximum loan size of $4.5 million.
  • Loan of up to 100% of the property value may be possible.
  • Membership in a relevant industry organization (e.g., AMA).
  • Preferred medical professionals like dentists, optometrists, and more.
  • Contact us for detailed criteria.

For Accountants, Lawyers, Professional Athletes, and Entertainment Professionals:

  • Maximum loan size of $2.0 million.
  • Loan of up to 90% of the property value.
  • Membership in a relevant industry organization (contact us for the list).
  • Specific professions for accountants and legal professionals.
  • Income exceeding $150,000 per annum, or soon to reach a similar income.
  • Rental income may be considered.
  • Contact us for full criteria.

For DHA Properties (Investors Only):

  • 90% waived LMI for investors buying Defence Housing Australia (DHA) properties.

For 105% Loan with No LMI:

  • Borrow 100% of the purchase price plus stamp duty.
  • Requires a guarantor related to you with property in Australia.

For 90% Loan with No LMI:

  • Loan must not exceed 90% of the property value.
  • No specific profession required.
  • Clear credit history.
  • Strong employment history.

For 85% Loan with No LMI and No Guarantor:

  • Loan must be at most 85% of the property value (85% LVR).
  • Excellent credit history.
  • Property purchase (refinancing for property purchase may be accepted).
  • No specific profession required.
  • Specific income criteria for properties in Sydney.
  • Major metro areas only.

This isn’t suitable for everyone, but it’s a great way for first home buyers to enter the market, avoid LMI, and secure a competitive interest rate. Contact us for a detailed assessment.

No LMI For First Home Buyers

Is LMI waived for first home buyers? Yes, LMI can be waived for first home buyers who qualify for the First Home Loan Deposit Scheme (FHLDS). The scheme is designed to help first home buyers enter the property market with a deposit as low as 5% without paying Lenders Mortgage Insurance. As part of the 2020-21 budget, the federal government announced a new FHLDS (new homes) scheme on top of the existing FHLDS scheme. This new scheme offers additional spots for new homes only and is available until 30 June 2021. It also provides higher property price caps. To find out if you qualify for the 5% deposit scheme, please contact us at 1300 889 743 or enquire online.

Are There First Home Buyer LMI Discounts?

Some mortgage insurance providers offer discounts on their LMI premium, ranging from 25% to 33%, for first home buyers. These discounts are available through specific lenders that have negotiated the discount with the LMI providers on behalf of their customers. Generally, your home loan must be for less than $1,200,000, and your deposit must not be from a borrowed source to be eligible for these discounts. Additionally, some lenders offer special interest rates for first home buyers or for 95% home loans. For the current special interest rate offers, please refer to our interest rates page.

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