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A top 10 originator has extended its risk fee special for alt doc/lo doc loans until 31 October 2013.
As part of the temporary deal, Better Mortgage Management is offering a risk fee of 0.5 per cent with a rate of 6.74 per cent at 80 per cent LVR.
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BMM Managing Director Murray Cowan said the offer can potentially save borrowers thousands of dollars while also removing a potential barrier to brokers writing the application.
“Risk fees or mortgage insurance on comparable loans is 1.5 per cent to 2.5 per cent of the loan amount, so when we reduce the risk fee to this extent it substantially improves the affordability of the loan,” Mr Cowan said.
“For instance, on a loan of $500,000, with the previous risk fee of 1.8 per cent, the saving will be $6,500 with the new fee of $2,500 compared to $9,000 previously.”
Mr Cowan said it is now a great time for brokers to review their databases for self-employed borrowers who could benefit before the offer ends on October 31.
The offer has been extended through October due to numerous requests from mortgage brokers, he added.
