Considering PMI? Here's what you need to know. Getty Images If you plan to take out a mortgage loan, one potential cost you could encounter is private mortgage insurance (PMI). PMI is a type of insurance coverage that a mortgage lender may require in order to protect itself from any potential losses in the event that a homeowner defaults on their home loan. Before you worry about PMI, make sure you crunch the numbers to see what you can afford. Can you afford to put down 20 percent or more? What kind of rates do you qualify for? Click on your state below to get expert advice based on your location. Here's a look at what private mortgage insurance is, who's responsible for buying it and the...
Continue reading...
1. HOMEOWNERSHIP ON YOUR TERMS With the right preparation and resources, you can buy a home that best suits your lifestyle. Mortgage insurance provides you with innovative options to help get you into homeownership. 2. BE ELIGIBLE FOR A BETTER INTEREST RATE Mortgage insurance provides a lender with the flexibility to offer you the same competitive mortgage interest rates available to homebuyers with a larger down payment. 3. MORE DOWN PAYMENT OPTIONS Don’t let the down payment be the barrier to your homeownership dreams. There are many mortgage insurance products that will help you to achieve homeownership. Let’s discuss the options that suit your situation best. 4. BUY INSTEAD OF RENTING...
Continue reading...
There are many expenses involved with buying a home, especially if you're utilizing a home mortgage loan for the purchase. If you plan to take out a conventional mortgage loan, one possible cost you could encounter is private mortgage insurance (PMI). Here's a look at what private mortgage insurance is, who's responsible for buying it, and the kind of coverage it offers. What is Private Mortgage Insurance, and when is it required? PMI is a type of insurance coverage that a mortgage lender may require in order to protect itself from any potential losses if a homeowner defaults on their home loan. It may be required if you have a conventional mortgage loan and put less than 20% down on a...
Continue reading...
Mortgage insurance premiums and private mortgage insurance help lenders offer home loans to customers who may not otherwise qualify. Mortgage insurance does this by protecting lenders against losses that may occur when a borrower defaults on a loan. There are two kinds of mortgage insurance which sound the same but they are different. FHA loans have mortgage insurance premiums. Conventional loans have private mortgage insurance. You may be required to pay for mortgage insurance when you get a loan to purchase a house as well as when you refinance. Let's talk about the differences between MIP and PMI. Mortgage insurance premiums for FHA loans One important difference between the mortgage...
Continue reading...
Mortgage Insurance vs. Homeowners Insurance Just like sunscreen protects you from the natural elements, home insurance does the same thing for your house and the items inside. Proper protection is a must, and whether it's for your skin, your car or your home, it’s important to research what protection will be best for you. When you buy a home, especially for the first time, you’ll hear a lot of terms brought up that you might not understand. Though you’ve likely done your own research on home insurance, the term mortgage insurance (also known as private mortgage insurance, or PMI) might throw you for a loop. But it’s just a way for your lender to get some financial sunscreen for your loan....
Continue reading...
In Canada, you can buy a home of $500,000 or less with a 5% down payment. Homes between $500,000 and $1,000,000 require a down payment of 5% on the first $500,000 and then 10% on the remainder. Homes over $1 million require a down payment of at least 20% on the entire purchase price. And that’s good news for many homebuyers. Saving for a down payment while juggling other household expenses can be a challenge. The mortgage insurance companies provide mortgage insurance to lenders. The three mortgage insurance companies are CMHC, Sagen As a borrower, you likely won’t deal with your mortgage insurance company directly. Instead, you apply for mortgage financing through your lender. If your...
Continue reading...
MGIC Investment Corporation’s MTG subsidiary Mortgage Guaranty Insurance Corp. (MGIC) has teamed up with CUNA Mutual Group in a bid to assist credit unions with private mortgage insurance (PMI). Founded in 1935, Madison, WI-based CUNA Mutual Group offers insurance and protection for credit unions, employees and members; lending solutions and marketing programs. It helps credit unions by providing their members with insurance and investment products to attain financial security in this fluctuating environment. Its investment products include institutional investments, member investments and brokerage services. CUNA Mutual Group Private Mortgage Insurance, the new program, provided by MGIC,...
Continue reading...
How is private mortgage insurance calculated? If you're obtaining a conventional loan and borrowing more than 80 percent of the value of the property (i.e. 5%, 10%, 15% down payment), the lender will require mortgage insurance. The mortgage insurance gives the lender a cushion between the loan amount and the resale of the home in the event of a foreclosure. In other words, if the down payment is only 5%, and the home goes into foreclosure, the lender only has 5% equity. If the house sells for less than 95%, the lender losses money. If however, the down payment was 20%, the lender can sell the home for 20% less and still break even. Mortgage insurance fills the gap between a low down payment...
Continue reading...
A white circle with a black border surrounding a chevron pointing up. It indicates 'click here to go back to the top of the page.' A white circle with a black border surrounding a chevron pointing up. It indicates 'click here to go back to the top of the page.' Private mortgage insurance can help first-time homebuyers get in the door Three evenly spaced dots forming an ellipsis: "...". Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification. Private mortgage insurance is required with a down payment of less than 20%. A 2018 report from Realtor.com revealed that millennial homebuyers are taking on bigger mortgages than ever before — a...
Continue reading...
With the rising cost of home ownership showing no signs of slowing down anytime soon, you might easily imagine that access to property ownership is more difficult these days. However, if you’re a potential home buyer with a down payment of at least 5% saved, there’s a solution that can help. Mortgage insurance. See how it can allow you to go from being a renter to a buyer. What’s the difference between this insurance, and the kind you get through the bank? It’s important not to confuse mortgage insurance with the life, disability or critical illness mortgage loan insurance you can get through your bank. The first is aimed at lenders, though it’s generally paid by the borrower. As for the...
Continue reading...
