• Mortgage Insurance

Life is unpredictable and so are the things. Anything that commences here will be ceased at one point o time. However, what you can do for it is to secure the thing that you plays a significant role in your life. One of the most important thing in anyone’s life is the home in which one lives. And most especially when someone seeks it on a mortgage. However, there is no need to worry at all. Here comes mortgage insurance. Mortgage insurance is an efficient concept that protects the lender or the title holder in the whole process where the borrower's default on payment fall ill, dies or is otherwise could not meat the contractual obligation of the mortgage.

Mortgage insurance refers to the private mortgage insurance (PMI), mortgage life insurance or mortgage title insurance. What these have in common is an obligation to make the lender or property holder completely in the event of specific cases of loss.

For borrowers, Mortgage insurance lowers the risk to the lender for providing a loan to you, so you can qualify for a loan that you might not otherwise be able to get to buy your home. Mortgage insurance comes up with the payment policy of “pay-as-you-go" or may be issued with lump sum payment policy at the time the mortgage is originated. For homeowners who are required to have PMI because of the 80% loan-to-value ratio rule, they can request that the insurance policy is canceled once 20% of the principal balance has been paid off.

Also, there are some major benefits of Mortgage insurance that many times are overlooked by the home buyers.

  • Higher loan-to-value ratio means less time is needed to save for a down payment and thus you can buy your home sooner.
  • Mortgage insurance will increase your buying power if you have set aside for the down payment. MI may help you afford more home than if you put 20% down.
  • It helps in expanding cash-flow options, so you may put less down and keep cash for other uses.
  • Some MI options render refund of premiums on cancellation.
  • Loans with MI typically are approved sooner than without Mortgage insurance.
  • Many Mortgage Insurance options may be canceled when not needed.

So, now if you are planning to mortgage fund for buying the home then do consider mortgage insurance.

Mortgage Insurance Types

Mortgage insurance is a profitable concept introduced to protect the interest of lender from the risk of default on loan by the borrower in case of de....

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Private Mortgage Insurance

Private Mortgage Insurance (PMI) is a significant type of insurance policy offered to the lender in order to protect them from borrower default loss. ....

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