Can a bank waive Mortgage Insurance for a borrower?

Question

Can a bank waive Mortgage Insurance for a borrower? Or its governments rule/law for a lender to ask for Mortgage Insurance from a borrower who is borrowing more than 80%. Can a bank offer any special like if you have at least 10% deposit will not have to pay the insurance.

Thanks in advance

Haseeb

Canberra, Australia.

Answer 1

They can, but they don't, as it's easy money they can force you to pay.

Answer 2

My suggestion is trying to get as much resource as you can before making final decision,here is a good one.http://insurance.online-frees.info/insur...

Answer 3

Yes they can waive it if you have a large enough of a deposit, or a guarantor  

Answer 4

In the U.S, they can, but they don't.  There is no law stating they have to have the insurance, but history ensures that they will ask for it on the loan.  Once you reach the magic 20% equity level, most lenders will drop it (in fact, some states have a requirement that they drop it at the 20% equity level if you ask).

With 10% down, you might be able to get an 80-10-10 loan in which you put 10 percent down, get an 80% mortgage and a 10% second mortgage.  This way, you avoid the PMI and get a deduction on the interest for the second mortgage.  Run the numbers very closely on this (including the tax deduction) to see if it works or not - there is no sense paying extra interest to avoid insurance payments.

Answer 5

My experience is in the USA, but for here the mortgage insurance is charged by the bank for conventional loans (there are gov't insured loans where the gov't laws determine when and if they must charge the mortgage insurance) so they can decide to charge that or not.  However, they usually charge it for over 80% loans and this is a company policy, its not like they would waive it for you or really even negotiate this.  I could see them possibly running a special where they did not charge this on some 90% loans, or something, but aside from something like this I can't see how you could avoid paying this (other than putting 20% or more down).