Mortgage Insurance is a kind of insurance policy. It compensates an investor or lender for losses in the event of borrower default on a mortgage loan. In other words, mortgage insurance protects the lender if you fall behind on your payments.
Read MoreMortgage insurance is a type of insurance policy that covers the lender in case the borrower defaults on the loan. It is usually required in the form of private mortgage insurance (PMI) when borrowers don’t make a down payment of at least 20% on most conventional loans. For FHA loans, it’s called a mandatory mortgage insurance premium (MIP). If you fit into either of those categories, then mortgage insurance is something you’ll have to deal with.
Read MoreTaking on a loan with PMI can often increase the amount of options you have, meaning that you may be able to take on a larger or riskier loan than you would regularly qualify for. Often, this means you can buy a home earlier, and start building up its equity without having to save up the full 20% of the home’s purchase price before doing so.
Read MoreIf you take out a conventional mortgage loan with a downpayment of less than 20% of the home’s purchase price, you may be required to purchase private mortgage insurance (PMI). Private mortgage insurance is a type of coverage that protects the lender in the event that the borrower defaults on a loan.
Read MoreWhile private mortgage insurance (PMI) generally exists to protect lenders for all types of home loans, MIP specifically protects FHA government-backed loans.A MIP (Mortgage Insurance Premium) protects the lender regardless of the amount of the down payment.
Read MoreThere are a few options when looking to avoid paying private mortgage insurance on your conventional loan. Private mortgage insurance is tacked on to a conventional loan when less than 20% down payment is paid.
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