Mortgage Insurance (MI) is often a requirement of home financing and we’ll explain why.
- How it’s tied to your loan program eligibility
- Why it’s sometimes required and sometimes not
- How you can eliminate it and possibly lower monthly payments
What is mortgage insurance?
Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get.
Typically, borrowers making a down payment of less than 20 percent of the purchase price of the home will need to pay for mortgage insurance. Mortgage insurance also is typically required on FHA and USDA loans. Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. But, it increases the cost of your loan. If you are required to pay mortgage insurance, it will be included in your total monthly payment that you make to your lender, your costs at closing, or both.
How to eliminate mortgage insurance
The requirements for removing your mortgage insurance premium (MIP) or private mortgage insurance (PMI) depend on your loan. Keep in mind the best way to figure out when you can remove your mortgage insurance is to call your current loan servicer. Mortgage Insurance on FHA Loans with LTV of 90% or more and USDA loans cannot be canceled and will remain for as long as you have the loan.
Feel informed enough to start the process?
Call one of our mortgage professionals today at 1-800-634-8616 or start the application.