Mortgage Insurance

Q.   What is Lenders Mortgage Insurance?

A.   All mortgages at First Australian are insured.  Contrary to what many Borrowers may think, Lenders Mortgage Insurance [LMI] does not protect the Borrower should they be unable to meet their mortgage repayments.  Instead, LMI protects the Lender from any losses resulting in the sale of a property due to default by the Borrower.  The LMI premium is payable once, at the time that the loan is settled.  The LMI premium may be payable by the Borrower dependant on their personal circumstances and is always payable when the amount borrowed is above 80% of the Lender's valuation of the property i.e. the Loan to Value Ratio [LVR].  Where the LMI premium is payable by the Borrower it can usually be added to the loan, although this is dependant on the LVR and your personal circumstances.  The Mortgage Insurance relating to your loan will be explained by the First Australian staff member, or consultant.