Important Details On Lender Paid Mortgage Insurance For Maine Home Mortgages

Mortgage insurance is generally mandated when a home buyer borrows more than eighty percent of the value of a property. It protects lenders against loss should a homeowner fall short of paying a loan. Although it insures the lender, it is usually the responsibility of the homeowner as a closing cost and additional recurring amount. In certain cases, a lender will cover the expense of the mortgage insurance. This blog important details on lender paid mortgage insurance for Maine home mortgages.

Important Details On Lender Paid Mortgage Insurance

Some mortgage companies will provide lender paid mortgage insurance loan options in exchange for a higher interest rate. When a homeowner pays mortgage insurance directly, it stays in effect until the loan is paid down to around eighty percent of the purchase price or updated appraised value. So at some point, the monthly payment is lowered when mortgage insurance is no longer applicable. With lender paid mortgage insurance loans, this reduction in monthly payment will not take place since the higher interest rate continues for the life of the loan. The only way to alter it is to refinance.

Choosing Between Owner Paid and Lender Paid Mortgage Insurance

Although the interest rate on lender paid mortgage insurance loan programs may be greater, it might still result in a lower monthly payment for certain buyers. Additionally, some homeowners can not deduct mortgage insurance amounts on their tax return whereas mortgage interest is generally tax deductible. Therefore, opting for an increased interest rate and lender paid mortgage insurance may also result in greater tax advantages for some homeowners.

Help with Maine Home Mortgages

Lender paid mortgage insurance options may be a good option for some buyers. It is important to analyze the figures and understand the short term and long-term differences. The above is important details on lender paid mortgage insurance for Maine home mortgages and is intended only as an introduction. To be referred to a local experienced mortgage company, contact Mini Major at Bean Group via phone at 617-877-4083 or email mini.major@beangroup.com.

About Mini Major

Mini views the purchase or sale of a home as a major life transition that usually evokes a wide array of challenges and emotions She brings her strong analytical, communication, and mediation skills to that process. For buyers, she helps to assess realistic goals and maps out a facilitation strategy that is uniquely designed to meet their individual styles with limited stress. For sellers, she provides honest, factual information necessary to set the right price and, together with the extraordinary resources of the Bean Group, provides state-of-the art marketing materials to present that property with appeal to the most appropriate potential buyers.

Ask a Question..

* indicates required field