There are many types of insurances. Car, Life, Health, Home, and Mortgage Insurance. But the Mortgage insurance is for the Lender, NOT the borrower. If you own a property with a mortgage loan that has more than 80% of the value of the home, you are required to pay monthly mortgage insurance.
The monthly mortgage insurance for conventional loans can be paid one of three ways.
- Paid Monthly By the borrower.
- Paid within the interest rate.
- Paid upfront in one payment (Seller can buy it out for you)
You are probably concerned what is in your best interest. I recommend getting a quote from all three and reviewing with your CPA, or Certified Financial Planner (CFP).
The cost of monthly insurance depends on the following items.
- Occupancy Type, Primary, Secondary, or Investment property
- Credit Score
- The Loan divided by the value of the home ratio. The higher the number the higher the cost.
- Loan Type, Fixed or Adjustable rate
- Property Type, Detached, Attached, Condo, Co-op.
Beware of the Bells and Whistles, Mortgage Companies/Banks like to advertise low down payment, no mortgage insurance. The mortgage insurance has to be paid, however it is paid within the interest rate. No matter how good the deal seems, always shop with a Local Bank, Mortgage Lender and Mortgage Broker. You will be able to determine who the best fit is for you and who has the best deal for you.
At Topaz Mortgage, we like to give you exact closing cost, our best interest rate and invite you to shop around. Call Todd LaBorwit today at 301-637-8054 to get started.