How To Avoid Paying Mortgage Insurance On My Mortgage?
Paying mortgage insurance is usually due to not putting down an adequate amount of money up front on your purchase loan. No home buyer enjoys paying mortgage insurance, and commonly a consumer will go to great lengths to avoid it. When you are in the market to purchase your next home, contact NSH Mortgage and we will show you how to avoid paying mortgage insurance.
What Is Mortgage Insurance?
If you are getting purchasing loan on your home, usually 20 percent is a good number to put down in cash on your home. If you are not able to put down this much, mortgage insurance may ne needed. Mortgage insurance, just like other insurance, is a way to protect loss for the lender. It insures against loss related to your mortgage.
Mortgage insurance comes in a variety of options, with two leading the way.
- Private Mortgage Insurance (This is known as PMI)
- Mortgage Insurance Premiums (This is known as MIP)
The Big Short On Mortgage Insurance Premiums
Private Mortgage Insurance
Private mortgage insurance is mostly setup with conventional mortgage lending, such as purchase loans. These are loans backed by Fannie Mae and Freddie Mac. Both of these lenders require at least 20 percent down at closing or a mortgage insurance policy is needed. The bottom-line is that either a large down payment is needed; otherwise an insurance policy is going to be added in.
How To Avoid Paying Mortgage Insurance!
The main way to avoid paying for insurance is to put a 20 percent down payment on your home!
When Will Mortgage Insurance Disappear?
For mortgage loans and other conventional loans, mortgage insurance is only temporary. Mortgage insurance is only required until you own 20 percent of your home. After you have made monthly mortgage payments, up to owning 20 percent in equity, you no longer are required to have mortgage insurance.
You should always check with your lender before quitting to pay insurance, as some policies may be different.
A few other ways you can avoid mortgage insurance include FHA and VA home loans. Both of these loan types have different options for being able to put 0 percent to 3.5 percent down on your home without having to obtain mortgage insurance.
NSH Mortgage Lender Will Help In Obtaining A Home Loan Without PMI
If you are in search of purchasing your next home, you will need financing. NSH Mortgage is a Florida mortgage lender with decades of experience. We have helped thousands of clients buy their first home, or their retirement home.
Contact us today if you are wanting financing for your next home, and we will show you how to avoid paying mortgage insurance on your purchase loan.