Mortgage insurance?

Mortgage insurance (Private mortgage insurance-PMI) and homeowners insurance are not the same

#1 Mortgage insurance

A. Conventional mortgage loans

This insurance is charged on all mortgage loans where the borrower pay less than 20% down on the house they are purchasing. In the event the borrower fail to pay the monthly mortgage as agreed, this insurance would pay the mortgage lender.

If you do not pay 20% or more down you are not able to opt out of this monthly payment.

Once you have 80% or more equity build up in your house, you are able to request this monthly payment be dropped. You are required to obtain an appraisal to prove the value of the house is equal or over 20% of the mortgage loan balance.

B. Government mortgage loans (FHA, VA or USDA)

There is something akin to PMI. This insurance is required on all federally backed mortgage loans. Normally this is paid for the life of the mortgage loan.

The rules might have changed in, that you might now be able to cancel this monthly payment after 5 years of mortgage payment and not missing a mortgage payment. You would need to inquire of your mortgage loan agent to know if this is true and the procedures needed for you to cancel this monthly payment.

#2. Homeowner's insurance

This insurance is required on all mortgage loans be they conventional or government mortgage loans. This insurance protects and pays for any damage man or natural caused. This insurance would also pay for any damage to the roof, water damage or other damage that require to be repaired and exceed your deductible amount, which is normally around $1000.00.

You are not able to opted out of this insurance.

You might shop around for a lower interest rate. Your interest rate would be determined by your credit score. There would not be a tremendous difference in your interest rate if you apply to several different mortgage lenders.

What does shopping mean? Are you applying for a mortgage loan with each mortgage lender you speak with? You are not able to know the interest rate you would be charged, without the mortgage lender obtaining your credit report and credit score.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

Mortgage insurance is required on conventional mortgages when the down payment is less than 20%. You are considered a greater risk so the loan is insured against you defaulting, and you pay for the insurance.

Mortgage insurance is required on all government-guaranteed loans.

Your way to 'opt out' is to have a down payment of 20% or more.

Generally, if you are putting less than 20% down, you have to may Private Mortgage Insurance (PMI).

Correct, it is not the same as homeowners insurance. PMI helps protect the lender in case of default.

You can "opt out" by providing a larger downpayment and getting a conventional loan.
FHA loans are required by law to charge this fee.

That is insurance for the mortgage. It protects the lender, not you. It would be required unless you put down over 20%.

That’ll be private mortgage insurance (PMI). It’s pretty much what it says on the can. PMI is insurance that covers your mortgage. It helps protect the lender in case you default. Most lenders require PMI for any purchase where the borrower is putting up less than a 20% down payment. So, you can opt out by buying a cheaper house or saving for a higher down payment. It’s important to note that PMI isn’t necessarily permanent unless you’re participating in certain loan programs (mortgage insurance for FHA loans can last 15-30 years depending on your down payment). If you’re on a conventional loan, you can request that your lender remove your PMI once you have a mortgage balance of 80% of the home’s appraised value. Basically, once you hit that 20% threshold, your PMI can be removed.

Mortgage insurance is always necessary unless you have 20% down. If you opt out it means the lender pays for it & they will increase your interest rate so that you really end up paying it anyway plus some.

No, you do not have the option to opt out. If you have a loan on the house, you must have insurance on it, or you won't get the loan. Insurance is a term of obtaining the loan. All lenders require it.

PMI pays the mortgage when you default, just making sure the lender is ok...you would lose the house if PMI was triggered.

Its basically insurance protecting the loan itself, where homeowners insurance protects the collateral for the loan.

Many insist you have mortgage insurance, some their own others you can just prove you have it in place and it is only insurance to cover the loan

you need to see what $60 is paying for, it cannot be homeowner's insurance for that kind of money