Get a Home Sooner than Later with LMI

2010 April 21

Credit cards are constantly being used to purchase things we need instantly.  Even though we do not have the available cash, a credit card can be a tool to buy us more time to purchase something that we need now.

There is a similar product when it comes to home loans, and this is called Lenders Mortgage Insurance or LMI.  A home is a necessity, and nearly everyone would like to own their own home, and would like to avoid renting a place if possible.  However, this is often made difficult by the requirements of deposits before loans can be granted.  A 20% is standard, and 20% is no paltry sum.

However, with the use of LMI, those who would like to be home owners earlier can now have an option to use LMI instead of saving for a deposit.  The concept is very similar to a credit card, where you need not save for the item since you can use your credit instead.  Like a credit card however, LMI can result in higher interests and overall higher costs, especially with loan to value ratios of more than 80%.  This is because for loans of more than 80% the premiums spike in prices, so it would be ideal to keep the LVR at a maximum of 80% or less.

Would you like to save for the deposit or would you like to purchase your home now?  The experts on home loans can help you decide which would be more practical for your particular need and specific circumstance.  With their help the topic of LMI would not seem that complicated, and deciding on what to do should be much easier.  Enquire online now about LMI, and whether it would be advisable to get it for your loan.

4 Responses leave one →
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