Andrew Vaughey, Why Mortgage Insurance Can Actually Save You Money<br><br><br><br><br> Mortgage insurance provides lenders a form of financial guarantee
which covers the lender in cases in which the borrower defaults on a
loan. For those looking to buy a home, agreeing to loan terms which
include mortgage insurance, increases the purchasing power of the buyer
a great deal. <p>
Agreeing to buy mortgage insurance allows individuals the opportunity
to buy a home with a down payment of only 5%-10%, as opposed to the 20%
that is often required when the lender does not have the guarantee of
mortgage insurance. </p><p>
Buyers typically purchase and pay for mortgage insurance in three
different ways. These ways include paying in annuals, monthly premiums,
or singles. We are going to take a closer look at the available
mortgage insurance payment options below: </p><p>
1.) Annuals: The annuals payment option allows the lender to collect
the first year?s premium at closing and then all subsequent payments
are made on a monthly basis. </p><p>
2.) Monthly Premiums: This payment option requires the buyer to only
pay for one month at closing and all remaining payments are then made
on a monthly basis. </p><p>
3.) Singles: The singles payment option requires the buyer to make a
one-time single payment that is typically financed as part of the
mortgage amount. </p><p>
Mortgage insurance ensures the lender is covered in cases in which the
borrower can no longer pay the loan and defaults on it. It is also a
powerful bargaining tool for potential borrowers who are unable to come
up with a large down payment. Offering to pay mortgage insurance can
decrease the amount of ones? down payment by 10% to 15%. </p><p>
But it is important to note that mortgage insurance does not have to be
paid forever. After a certain period of time and when certain
conditions are met, mortgage insurance is no longer required to be
carried on the mortgage. </p><p>
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