Lender's mortgage insurance protects the lender in the event that you default
on your loan and the outstanding value of your loan is greater than what they
receive from selling the property.
In nearly all cases, if you borrow more than 80 percent of what the lender considers
to be the value of the property they will ask you to pay their mortgage insurance.
Some lenders require the borrower to pay the lender's mortgage insurance at loan to
valuation ratios less than 80 per cent. However, the calculator assumes the borrower is
only required to pay if they borrow 80 per cent or more of the property value.
Lender's mortgage insurance is usually charged as a one-off premium and is calculated on
a sliding scale. That is, the greater the percentage of the property value you borrow and
the more money you borrow, the higher the mortgage insurance premium payable.
The estimate for lender's mortgage insurance is an estimate only and will depend upon
the mortgage insurer, the individual risk of the borrower and the absolute loan size.
DISCLAIMER :The information on this CD/website is for general information purposes only. It is not intended as financial or investment advice and should not be construed or relied on as such. Before making any commitment of a financial nature you should seek advice from a qualified and registered financial or investment adviser.
