What Is Lender’s Mortgage Insurance (LMI)?
How to Qualify for Waived LMI
In specific circumstances, LMI can be waived, allowing borrowers to avoid this additional cost. Here are the main ways to qualify for an LMI waiver:
Profession-Based LMI Waivers
Certain high-income, low-risk professions—such as doctors, lawyers, accountants, and veterinarians—are often eligible for LMI waivers. Lenders view these professions as more financially stable and less likely to default on a loan, which allows them to offer favourable terms, including the possibility of waiving LMI with smaller deposits (sometimes as low as 5%).
Guarantor Loans
First Home Buyer Schemes
Strong Financial Profile
Borrowers with an excellent credit score, stable income, and low debt levels may be able to negotiate with lenders for an LMI waiver. Lenders may consider these borrowers lower risk and may be willing to waive LMI in exchange for a smaller deposit.
FAQS
Can LMI be waived?
What professions qualify for waived LMI?
Yes, trust loans come with specific risks, including:
- Complex Legal Structures: Managing a loan through a trust involves more legal and financial complexities than a personal loan.
- Tax Implications: Trust loans may have specific tax consequences, depending on the type of trust and how the loan is structured.
- Repayment Obligations: The trust is responsible for repaying the loan, and if the trust’s income or assets are insufficient, the trustees may face challenges.
These professions are often viewed as financially stable, and lenders are willing to waive LMI in exchange for smaller deposits.
Can I avoid LMI with a guarantor?
Do first-home buyers qualify for waived LMI?
Can I waive LMI with a strong financial profile?
How do I apply for an LMI waiver?
To apply for an LMI waiver, you’ll need to meet the eligibility criteria set by the lender. This may involve providing documentation related to your profession, financial status, or a guarantor’s details. Smartfinn Advisors can assist you in assessing your eligibility and preparing the necessary documentation to secure a waiver.
