Lenders Mortgage Insurance: What is it and why did they decline my non-resident home loan? This article explains what Lenders Mortgage Insurance (‘LMI’) is. The article then provides information on when a home loan can be approved greater than 80% LVR (ie, with LMI approval). What is Lenders Mortgage Insurance? Lenders mortgage insurance is insurance that protects the bank in the event of buyer default. The easiest way to explain it is to compare it to a person insuring their car. In the event of an accident or theft the insurance company will pay out the car owner to either fix the car or buy a new car. LMI is similar in that it pays out the bank should the borrower default on the mortgage and the bank makes a loss. Are all home loans mortgage insured? No. As a generally rule only loans that are greater than 80% LVR (‘Loan to Value Ratio) are mortgage insured. A borrower with… Read More
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