Why Mortgage Insurance Can Actually Save You Money

Mortgage insurance provides lenders a form of financial guarantee which covers the lender in cases in which the borrower defaults on a loan. For those looking to buy a home, agreeing to loan terms which include mortgage insurance, increases the purchasing power of the buyer a great deal.

Agreeing to buy mortgage insurance allows individuals the opportunity to buy a home with a down payment of only 5%-10%, as opposed to the 20% that is often required when the lender does not have the guarantee of mortgage insurance.

Buyers typically purchase and pay for mortgage insurance in three different ways. These ways include paying in annuals, monthly premiums, or singles. We are going to take a closer look at the available mortgage insurance payment options below:

1.) Annuals: The annuals payment option allows the lender to collect the first year’s premium at closing and then all subsequent payments are made on a monthly basis.

2.) Monthly Premiums: This payment option requires the buyer to only pay for one month at closing and all remaining payments are then made on a monthly basis.

3.) Singles: The singles payment option requires the buyer to make a one-time single payment that is typically financed as part of the mortgage amount.

Mortgage insurance ensures the lender is covered in cases in which the borrower can no longer pay the loan and defaults on it. It is also a powerful bargaining tool for potential borrowers who are unable to come up with a large down payment. Offering to pay mortgage insurance can decrease the amount of ones’ down payment by 10% to 15%.

But it is important to note that mortgage insurance does not have to be paid forever. After a certain period of time and when certain conditions are met, mortgage insurance is no longer required to be carried on the mortgage. http://forexmarket.site/listing-business-prosperity-ultimate-1635.html

Author : Business Developer, Supervisor, and Coordinator

SaleResorts.com Travel & Tourist Information Learn more: Giuelith.com Business Directory - Submit Link Free! Worldbank.nu Business Travel Agent: Travelbroker.se [eal]Travel Guide – Travel Items[/eal]

Related Posts

Anzeigen in Europa

Wir sind an vorderster Front, wenn Handel und Wirtschaft wieder Fahrt aufnehmen, nachdem wir dieRead More

Hiking Adventures: Perfect for Family Trips or Romantic Getaways

Are you interested in taking a trip? Whether you are looking to take a traditionalRead More

Help Finding The Right Camp

From basketball and horseback riding to the performing arts and cheerleading, there are many differentRead More

Leave a Reply

Your email address will not be published. Required fields are marked *