Do you know what to expect when it comes to mortgage insurance as you work to become pre-approved for a home loan and eventually secure your home loan from a loan officer? In my last blog post, I touched on the basics of home loan insurance (read here!)
In that post, I explained that you are required to have mortgage insurance with conventional financing unless the purchase includes 20 percent down, or is on a refinance with 20 percent equity. However, some lenders may require it even with 20 percent down.
An important aspect of mortgage insurance to note is that once you're at 80 percent loan to value (ex: $160,000 loan, $40,000 equity on a house valued at $200,000) you can call or write and request the mortgage insurance be removed on certain loan types. Other mortgage insurance might potentially fall off automatically when you're at 78 percent loan to value.
There are life-of-the-loan mortgage insurance plans with certain lenders. Be sure to reference your Truth in Lending Act (TILA) document as well as your amortization schedule, as those two documents will give you the exact dates as to when the 78 percent automatically happens or when you have the opportunity to make that request at 80 percent, if it applies to your loan type.
Tax advantages may be present in one type of mortgage over another. It’s your lender’s responsibility to shop multiple mortgage insurance companies, which I always do for my clients. Know your options and ask the right questions of your lender before making your decision.
If you live in Louisiana, Arkansas, Mississippi, Alabama, and Florida and want to learn more about working with me on your mortgage, check out my other website www.weeksteam.com, and for more on Mortgage Insurance check out my video:
Download my PMI Guide with questions to ask your lender: PMI Guide
Every year an average of 21 million people apply for mortgages in the US, and only around 7 million close. I'm on a mission is to change that by spreading mortgage education. Sign up for my newsletter to be a part of my Mortgage Peace Movement!