4. Lender Mortgage Insurance

Most banks and financial institutions that lend you more than their normal lending margins require Lenders' Mortgage Insurance. Rate Star may require our clients to pay a Lenders' Mortgage Insurance premium if we lend you more than 80% of the value of the property for income verified home loans. In some scenarios the cost of lenders mortgage insurance may be added to the loan.

For low documentation and no documentation loans the premium may be paid by the funder or paid by the client to reduce the applicable interest rate (conditions apply).

Essentially Lenders' Mortgage Insurance gives you the opportunity to purchase a property with a smaller deposit.

Lenders' Mortgage Insurance protects the lender (not you, the borrower) should you default and the property is sold for less than the outstanding amount on the loan. You remain liable for any amount owing under the contract even if the mortgage insurer has paid that amount to the lender.

Even though it is the lender who is the beneficiary, it is you who pays the one off insurance charge.

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