Mortgage Insurance: What Am I Insured Against?

If you’re buying a new house, you’re likely looking at the various terms on your paperwork and have noticed “mortgage insurance” on there. It’s not something that everyone is familiar with, so here is some basic info that can help answer your questions.

What is mortgage insurance?
Mortgage insurance is not a benefit to the home buyer and does not protect them against anything. Actually, it will only protect the mortgage company/bank in the event that the borrower defaults on the loan and doesn’t pay their mortgage. It is required when a borrower puts less than 20% down on the purchase or has less than 20% in equity during the refinance process on a home.

Aaron Hicks, Mortgage Consultant with Homestreet Bank shares that when a borrower is looking to get a mortgage, it can affect the loan approval process. Hicks shares, “It can increase the borrower’s monthly payment, which overall effects a borrower’s debt-to-income qualifications. Mortgage insurance companies require stricter guidelines depending on a borrower’s debt-to-income, credit score, loan to value, and type of property. Sometimes mortgage insurance companies require additional supporting documentation above what the bank may require and/or additional underwriting review.”

What kind of mortgage insurance is there?
Hicks says that there are multiple types of mortgage insurance for conventional loans. There is monthly mortgage insurance, single premium mortgage insurance, or split premium mortgage insurance. There is also lender paid mortgage insurance. For some loans, especially FHA loans, the premium will last for the life of the loan, even when your equity position gets you above the 20% mark. If the homeowner has a conventional financing method, the insurance can be removed once 20% equity in the home is reached. I can do a quick market analysis to determine if borrowers are at the 20% equity mark.  The lender will require a formal appraisal to remove mortgage insurance, which costs $400-$600. So, it is a good idea to verify you’ve reached that point before ‘getting official’ with your request.

Purchasing a home is very involved and requires various steps and attention to detail. Oftentimes, questions and issues will arise, and this is one of the many reasons why it’s critical to work with an experienced Realtor. Whether it’s a question about mortgage insurance or something else entirely, I’m happy to answer your questions and will work with you to help get the answers you need. Contact me for info!

Posted on March 19, 2018 at 10:38 pm
Nancy Johns | Category: Home Buying Tips, Selling Your Home | Tagged , , , , , , , , , , , ,

3 Tips to Increase Curb Appeal

When it comes to selling your home, making a great first impression is very important. If a potential home buyer likes what they see on the outside, they’ll likely want to see what the inside is like. In this blog, we’ll go over some simple, low-cost curb appeal improvements that are easy to do and can make the outside of your home look charming and pleasing to the eye.

Tip #1: Make it welcoming.
A warm, welcoming entrance to the home makes potential homebuyers comfortable and it allows them to more easily imagine themselves living in the home if they bought it. If you have a porch area, add some cozy seating to it, like comfortable rocking chairs. A little bit of warmth goes a long way.

 

 

 

 

 

Tip #2: Add color.
If you have a walkway, add color to it with bright flowers. Either plant them to line the path, or get large pots and plant a variety of flowers in them. If you have a covered porch area or a place to hang some hanging flower baskets, this is also a great way to add color to the space. These are simple and relatively low cost options to complement the house and make it more attractive.

 

 

Tip #3:  Maximize the space.
If you have a condo or just a small area in the front of your home and are limited on space, you can still maximize the space well. Flowers and a touch of antique décor for example, create a unique and inviting space that people will want to discover.

 

 

 

 

 

 

Most importantly, be sure that your front yard is maintained well and that unnecessary clutter is removed from walkways, porches, patios, and other areas that are within the vision of people that drive by your home. Mow your lawn and keep it edged. Creating curb appeal can be fun and can add value to your home.

Selling your home only takes one buyer and it’s often that first impression that makes a lasting difference!

Posted on August 9, 2014 at 9:48 pm
Nancy Johns | Category: Uncategorized | Tagged , , , , , , , , , , ,