What is Mortgage Insurance?
This is generally required in one form or another when the down payment is less than 20%, and protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly premium. Depending on your particulars, there are ways in which mortgage insurance can sometimes be avoided at purchase, or dropped altogether at some point in the future. If your credit score is high enough, we can look at several products to help you avoid PMI.
A.Mortgage Insurance insures lenders in the event of a borrower’s foreclosure. It is paid for by the borrower, and allows lenders to grant loans that they otherwise would not consider. Depending on credit scores and loan structure, mortgage insurance may be required when the down payment is less than 20%. top.
Mortgage insurance is a product that lenders will often require as a condition of making a loan when the borrower is generally making less than a 20% down payment. The insurance protects the lender in the event the borrower defaults so it enables them to make lower down payment loans with the same amount of risk as loans with larger down payments.
