Mortgage insurance is often required when a home buyer puts less than twenty percent down of the value of a property. It protects mortgage companies against financial loss when a homeowner fail to pay a mortgage. Even though it insures the lender, it is commonly billed to the homeowner as a closing cost and additional monthly fee. In certain cases, a mortgage company will cover the expense of the mortgage insurance. This article includes important information on lender paid mortgage insurance for Treasure Coast FL mortgages.
Important Information On Lender Paid Mortgage Insurance
Some lenders will provide lender paid mortgage insurance loan alternatives in exchange for a higher interest rate. When a homeowner pays mortgage insurance themselves, it remains in place while the loan amount is higher than eighty percent of the original price or updated appraised value. So eventually, the monthly payment is lowered when mortgage insurance is no longer mandated. With lender paid mortgage insurance loans, this drop in monthly payment will not occur since the higher interest rate remains in effect for the life of the mortgage. The only way to change it is to refinance.
Choosing Between Owner Paid and Lender Paid Mortgage Insurance
Although the interest rate on lender paid mortgage insurance loans may be greater, it can still lead to a lower monthly payment for some buyers. Additionally, mortgage insurance may not be tax deductible for all buyers whereas interest paid on a loan is normally tax deductible. Therefore, selecting an increased interest rate and lender paid mortgage insurance can also lead to greater tax savings for certain buyers.
Help with Treasure Coast FL Mortgages
Lender paid mortgage insurance loans may be a good option for some buyers. It is important to analyze the figures and understand the immediate and long-term differences. The above is important information on lender paid mortgage insurance for Treasure Coast FL mortgages and is intended only as an introduction. To be referred to a local reputable mortgage company, contact Sonny Solomon at The Keyes Company via phone at 561-247-1047 or email email@example.com.