Lenders Mortgage Insurance Explained
b'ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode\\n\\n\\n\\n\\n\\n\\n\\n\\n{"@context":"http:\\\\/\\\\/schema.org\\\\/","@id":"https:\\\\/\\\\/onproperty.com.au\\\\/lenders-mortgage-insurance-explained\\\\/#arve-youtube-nzmsfwynvna659a0b2e7a9f7332993270","type":"VideoObject","embedURL":"https:\\\\/\\\\/www.youtube-nocookie.com\\\\/embed\\\\/NZMSfWYnvnA?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=0&autoplay=0"}\\n\\n\\n\\nLender\'s mortgage insurance is a one time fee the borrow pays to protect the lender against a riskier loan. Lender\'s Mortgage Insurance explained\\n\\nSo let\'s say you want to invest in property but you don\'t have the minimum 20% deposit required. Well, you\'re likely going to have to pay what\'s called\\xa0Lender\'s Mortgage Insurance.\\xa0But what exactly is\\xa0Lender\'s Mortgage Insurance\\xa0and is it worth the cost? In this episode, I\'m going explain Lender\'s Mortgage Insurance. What exactly it covers and why you would want to get it.\\n\\nHey, I\'m Ryan from onproperty.com.au, helping you find positive cash flow property and I\'ve just moved house. If you\'re watching the video, you can see a bunch of boxes in the background behind me so I apologize that I don\'t have the best setup today, but I did want to create some good content for you. And this is a question that a lot of people ask. A lot of people want to see lender\'s mortgage insurance explained. And I do feel like often times, banks and lenders and sometimes mortgage brokers don\'t really explain exactly what lender\'s mortgage insurance is or they don\'t take enough time explaining it so you actually understand it. So we\'re going to get down to it, try and understand exactly what it is and why it could benefit us and whether or not it\'s worth paying for.\\n\\nLender\'s mortgage insurance is an insurance fee that helps to cover the lender when they\'re taking an increased risk on a loan. So, lender\'s mortgage insurance, some people believe that it\'s actually to cover you personally as the borrower of the loan, but it\'s not. It\'s for the lender to protect them if they\'re taking an increased risk on a loan. What exactly is an increased risk? Well, for most properties \\u2013 most residential properties \\u2013 banks want to see at least a 20% deposit in which case they won\'t charge you lender\'s mortgage insurance.\\n\\nThey like to see a 20% deposit because if you, for some reason, default on your loan and they need to sell their property, they\'re quite confident that they\'re going to get at least 80% of the value that you paid for the property back when they sell the property and this will cover their loan.\\n\\nHowever, if you\'re only borrowing 5% of the property\'s value, then they\'re a lot less confident that if you default on the loan they\'re going to get 95% of the value of the property back. So it\'s a higher risk loan for them. And so, in order to cover this higher risk, they charge an insurance fee to cover that extra risk. Obviously, a lot of people will take out this insurance, not everyone will need it. That\'s the way that insurance works.\\n\\nSo the banks will charge you a one-time fee and everyone else a one-time fee and I guess this insurance covers them against those few circumstances where people do default on a loan and they have more trouble selling the property and getting enough value back. So lender\'s mortgage insurance, it\'s a one-time fee that you pay and it goes to protect the lender because they\'re taking an increased risk on you to get the loan.\\n\\nThis sounds like it\'s not very beneficial to you, right? It\'s a fee that you have to pay, generally, it\'s added on to the loan so your loan gets bigger, but you\'ve got to pay it and it protects them as the banks. Well, what\'s the benefit to you as a borrower? Well, the benefits aren\'t obvious, but they are there. The benefit of lender\'s mortgage insurance is that if you don\'t have the full deposit, then you can still get money from the bank.\\n\\nIf lender\'s mortgage insurance didn\'t exist,'