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3 Things You Should Know About Mortgage Insurance

A mortgage may seem straightforward, but you need to keep many things in mind.
Modern Times Apr 24, 2019
Prospective homeowners already have a lot on their plates.

From finding the perfect house to addressing the lending process, it’s easy to overlook mortgage insurance, but it shouldn’t fall through the cracks.

You don’t have to have it

Unlike, say, car or health insurance, mortgage insurance isn’t necessarily a requirement. That is, if you meet certain conditions.

These include putting a large enough amount down, doing a combination loan, or accepting a higher interest rate. Not for you? Consider lenders mortgage insurance to protect your investments.

You can pay it your way

You have a handful of ways to pay for mortgage insurance, not all as traditional as you might think. Often, your premium is included in your monthly mortgage payment.

However, some lenders will wrap up a handful of your payments with a higher interest rate, which can be beneficial because mortgage payments are often tax-deductible.

FHA Insurance is for the life of the loan

FHA loans differ from traditional Private Mortgage Insurance because they exist as long as your loan does.

Even though the initial 3.5% down might seem tempting at first, it’s important to take a step back to address your overall budget and whether or not it might be worth it to pay a higher down payment in exchange for a more flexible loan.
Mortgage insurance is a little more complicated than it might seem.

With a lot of moving parts and different factors, it can seem a little overwhelming for new homeowners, the right lenders will be able to guide you through the mortgage process as well as detail what form of insurance you need to cover your loan.