Lenders Mortgage Insurance (LMI) + AffordAssist ๐๐ฒ๐ฝ๐ผ๐๐ถ๐ ๐๐ฒ๐ฟ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ฒ
Dear all
We anticipated economic shifts and their potential effects on the residential property sector, including home loans and real estate, as far back as 2017.
Eight years later, AffordAssist is a key contributor to enabling home ownership. However, addressing the national housing crisis requires a collaborative effort and diverse solutions.
In this post, I will discuss how the AffordAssist Interest-Free Deferred Deposit Solution, including the Deposit Certificate, relates to Lenders Mortgage Insurance (LMI).
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๐๐ฎ๐ฐ๐ธ๐ด๐ฟ๐ผ๐๐ป๐ฑ – Housing Affordability is an Australian Legacy:
I’m a strong admirer of Sir Robert Menzies, particularly his government’s Housing Policy introduced in 1963. This policy included Lenders Mortgage Insurance (LMI), which was a significant innovation.
LMI allows lenders to protect their loan funds for loans exceeding an 80% Loan-to-Value Ratio (LVR), making it possible for applicants to secure home loans with less than a 20% deposit.
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I believe that LMI has consistently been one of the most effective solutions for addressing housing affordability by assisting with the deposit. For 62 years, it has provided a crucial deposit solution for both loan applicants and lenders.
I would be concerned to see a home loan industry without LMI, given the potential limitations and consequences that might be imposed on all loan applicants. The established processes behind LMI have significantly enhanced the Australian funding and lending industry’s capacity to transact, and I see this as an innovation that has benefited all Australians.
๐ง๐ต๐ฒ ๐ณ๐๐๐๐ฟ๐ฒ: I believe that adding a premium to every home loan application, including those with less than 80% LVR, would greatly benefit the LMI industry and Funders/Lenders. This additional revenue would provide greater future stability for all parties involved.
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๐๐ผ๐ ๐ฑ๐ผ๐ฒ๐ ๐๐ต๐ฒ ๐๐ฒ๐ฝ๐ผ๐๐ถ๐ ๐๐ฒ๐ฟ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ฒ ๐ฟ๐ฒ๐น๐ฎ๐๐ฒ ๐๐ผ ๐๐ฒ๐ป๐ฑ๐ฒ๐ฟ๐ ๐ ๐ผ๐ฟ๐๐ด๐ฎ๐ด๐ฒ ๐๐ป๐๐๐ฟ๐ฎ๐ป๐ฐ๐ฒ ๐๐ ๐?
๐ฆ๐ต๐ผ๐ฟ๐ ๐ฎ๐ป๐๐๐ฒ๐ฟ: AffordAssist provides a proven present-day deposit solution. A Deposit Certificate for the amount needed to settle a home loan. Without increasing risk to the 1st mortgage lender.
LMI and Deposit Certificate do work together. LMI as noted above covers the lenders loan amount only and the Deposit Certificate covers the Deferred Deposit amount. The AffordAssist governance process includes a Deferred Deposit Agreement (DDA) between the buyer and sellers with relevant clauses to protect both the buyer and seller.
AffordAssist industry leading governance and core service fundamentals may be likened to Credit Risk Transfer (CRT) thus positioning the service as a viable home loan deposit solution for a lender and LMI. Less RISK to the lender. Higher profits for LMI. Factual results over the past 8 years, better than industry, most lenders and LMI
I also see the AffordAssist innovation benefiting all Australians.
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๐๐ฒ๐๐ฎ๐ถ๐น๐ – AffordAssist Deposit Certificate:
AffordAssist is one of the most innovative combination home loan and property deposit solutions to emerge in decades. An Australian first. Now also in New Zealand. INTEREST FREE deferred deposit solution. Secure a home loan with as little as 1% cash. Taps into the equity of willing property sellers. Buy with an initial part-deposit, defer and pay the balance of the deposit typically within 60-months. Buyers get 100% title ownership.
In a way, AffordAssist has started new industry phrases:
ย ย โข Deferred Deposit Home Loans
ย ย โข Deferred Deposit Property Sales
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AffordAssist โadds toโ and โfits perfectlyโ into the existing lending and property Contract of Sale processes. In our experience it is the AffordAssist framework that enables better outcomes for all stakeholders. The framework includes systems, governance process and coaching, all CRITICAL to the:
ย ย 1. Loan settlement – Deposit Certificate, confirms adherence to the governance process and is critical to settle the home loan. Forms part of funds to settle; and
ย ย 2. Property settlement – Deferred Deposit Agreement (DDA) to manage the balance of the deposit payments to settle the property and provide stakeholder protection.
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I trust the above provides clarity to help with how LMI and AffordAssist Deposit Certificate do work together.
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B2B โ AffordAssist provides and manages the governance process. Are you a mortgage broker, lender, developer, an agent, in the affordable housing space or a housing minister? We welcome your team work. Join our mission, together we can help increase home ownership.
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Regards
AA