What is Lenders Mortgage Insurance? When do I have to pay?
Lenders mortgage insurance covers the lender in the event that the borrower defaults on the mortgage and the amount recovered upon the sale of the property is less than what is owed by the borrower. This insurance does not cover the borrower. For most lenders the client pays this once only cost if they borrow more than 80% of the value of the property, or they are borrowing more than $500,000. Lenders can differ as to when they require the client to pay for the premium, so it is worth finding out what the lenders guidelines are. For the majority of lenders, mortgage insurance is paid at settlement. For professionals, there is the possibility of having lenders mortgage insurance waived up to 93% of the value of the property, saving the borrower thousands of dollars in insurance premiums.
