Waived LMI And No LMI
Certain professionals and eligible borrowers can either significantly reduce or entirely avoid Lenders Mortgage Insurance (LMI) when purchasing property.
Understanding LMI Waivers
What is LMI?
When purchasing a property and borrowing over 80% of its value, you generally have to pay for Lenders Mortgage Insurance (LMI).
Waived LMI Explained
However, if you belong to specific professions or earn a high income, some lenders offer to waive the LMI for you. This means substantial savings when buying a property. For instance, if you’re acquiring a million-dollar property, the savings from not paying LMI can be significant.
Eligibility for LMI Waivers
Waived LMI home loans are offered to:
- Specific Professionals: Such as doctors, accountants, lawyers, and more.
- Investors in DHA Properties: Certain lenders provide 90% waived LMI when buying a Defence Housing Australia (DHA) property as an investment.
- First Home Buyers with a Guarantor: They can borrow up to 105% of the property value without paying LMI.
- Home Buyers: Specific lenders waive LMI if you’re borrowing more than 80% of the property value.
Criteria for LMI Waivers
To be eligible for LMI waivers, you must meet the following requirements:
For Doctors:
- Maximum loan size of $4.5 million.
- Borrow up to 100% of the property value.
- Membership in a relevant industry organization (e.g., AMA).
- Being a preferred medical professional, such as a dentist, optometrist, veterinarian, chiropractor, or pharmacist.
For Accountants, Lawyers, Professional Athletes, and Entertainment Professionals:
- Maximum loan size of $2.0 million.
- Borrow up to 90% of the property value.
- Membership in a relevant industry organization.
- Specific roles in the profession (e.g., lawyer, CFO, athlete).
- A minimum income of over $150,000 per annum or a similar expected income. Rental income may be considered.
For DHA Property Investors:
- 90% waived LMI available with some lenders.
- No specific occupation requirements.
For 105% Loans with No LMI:
- Borrow 100% of the purchase price and stamp duty.
- A guarantor who is related to you and owns property in Australia.
- No need for a deposit.
- No specific profession required.
For 90% Loans with No LMI:
- Loan must not exceed 90% of the property value.
- No profession requirements.
- Clear credit history.
- Strong employment history.
- Self-employed for two years without tax records accepted with 6 months BAS and bank statements.
- Borrow up to $1.5 million.
- No credit scoring.
For 85% Loans with No LMI and No Guarantor:
- Loan must be no more than 85% of the property value (85% LVR).
- Perfect credit history.
- Property purchase or refinancing for property acquisition may be accepted.
- No profession requirements.
- Maximum $1,000,000 loan size.
- A maximum of $1,500,000 in total loans with no LMI.
- Available in major metro areas.
- In Sydney, the combined income of all borrowers must exceed $180,000 (excluding rent income).
These options might not suit everyone, but they offer a fantastic way for first-time home buyers to enter the market, avoid LMI, and secure an excellent interest rate. If you’re interested, feel free to contact us, and we’ll guide you through the details.
Here are two lenders offering 85% No LMI home loans:
One lender has a maximum loan size of $850,000, accepts various income types, and has no credit scoring. The other lender provides this offer for established properties and determines interest rates based on security type, not loan purpose. There are also two $1 LMI offers available for first home buyers with specific criteria.
Please note that these are not LMI waivers, and you are required to pay $1 in LMI fees, subject to approval. For eligibility, call us on 1300 401 847 or complete our assessment form.
Is LMI waived for first home buyers?
Yes, LMI can be waived for first home buyers through the First Home Loan Deposit Scheme (FHLDS). This nationwide scheme aims to help first home buyers enter the property market with a deposit as low as 5% without paying Lenders Mortgage Insurance.
First Home Buyer LMI Discounts:
Some select mortgage insurance providers offer a 25%-33% discount on LMI premiums for first home buyers. This discount is available through specific lenders that negotiate these offers on behalf of their customers. Typically, the home loan must be less than $1,200,000, and the deposit should not be from a borrowed source.
First Home Buyer Rate Discounts:
Certain lenders provide special interest rates for first home buyers or 95% home loans. For current special offers, please refer to our interest rates page.
Why do banks accept only certain professionals for waived LMI?
Banks prefer specific professionals for waived LMI, higher loan limits, and reduced interest rates because they are perceived as lower-risk borrowers who rarely default on their mortgages, make on-time repayments, and have connections to high net-worth borrowers. This selection minimizes risk and maximizes returns for the lender.
How can I reduce my LMI premium?
To lower your LMI premium, start by understanding how it’s calculated and then explore strategies to qualify for a cheaper premium. Factors affecting the premium include your loan amount, Loan to Value Ratio (LVR), choice of lender and mortgage insurer, eligibility for a guarantor loan, and proof of genuine savings. You can find more tips on avoiding mortgage insurance on our dedicated page.
Apply for a No LMI Home Loan:
Our experienced mortgage brokers are well-informed about lenders and mortgage insurers offering the most competitive rates. Some lenders may have unadvertised LMI specials that can be highly advantageous. For a discussion with our specialist mortgage brokers, please complete our free assessment form or call us at 1300 401 847.
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