MAP has had a few clients lately who have applied directly to their lender or through another mortgage broker and been advised that the bank would happily lend to them however their lenders mortgage insurer would not due to their temporary residency or expat status.
The result of this is that the home loan application will be declined as the bank will not, without Lenders Mortgage Insurance, agree to approve the mortgage. This article outlines what lenders mortgage insurance is and how to avoid such a situation.
LMI is insurance that protects the bank when a borrower does not have a full 20% deposit. Essentially, it covers the bank should the borrower fail to pay the mortgage and the bank makes a loss on sale. LMI is, as a rule, only applied to home loans with an LVR of greater than 80%. It is insurance that protects the bank, not the borrower.
LMI is just like car or home insurance. Except in this case the asset being protected are the loan funds advanced to the borrower. So, just like you insure your car against fire or theft, the bank insures the loan just in case the borrower can not pay it back. The only difference is that the LMI premium is paid by the borrower even though the insurance protects the bank only. It would kind of be like you insuring your car and getting paid out if it was stolen, but the annual premium was paid by someone else.
Note: Unlike car or home insurance, LMI is a once off upfront fee.
If you have been declined because of your residency status there still may be hope. There two main lenders mortgage insurers in the market place as well as a handful of banks who self insure, that is, they insure the loans themselves. Therefore, your loan may have been declined by one of the lenders mortgage insurers but another one may well approve your loan.
It is therefore important that you get professional expert advice from a non-resident home loan specialist before applying again so as not to risk another credit enquiry on your credit file.
More information can be found here on what to do when your home loan has been declined by the banks or lenders mortgage insurers.
DaniellaWorking with Michael was an absolute delight.
I was a first home buyer and couldn’t think going anywhere else. Highly recommend to go through MAP home loans.He was quick to respond to all my queries, managed to get the loan approved under a strict timeline and I was very impressed. Michael also followed up with me once I settled, I truly appreciate all his hard work to make this happen.
Adnan SharafatI am very thankful to Michael for my primary property construction loan. I approached many mortgage agents for the loan amount as desired, but they could not process because of my overseas profile.
I am an Australian PR holder, based in Dubai and after reading online reviews of MAP loans, I approached to Michael where he completed my construction loan process very confidently even, I did not feel that I am living in different time zone as he was always available for my queries.
Michael also helped for my investment property loan, and again he did awesome job and completed the loan approval process in less than a month. I would like to strongly recommend him for the home loan services with no hidden cost and surprises.
All the best Michael in your future success 😊
PeterMy wife is on a 820 visa and Michael helped us get a home loan. He was a great with communication and answered all of my questions. Recommended if you have if you have issue surrounding temporary visas or you just want a great mortgage broker.
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