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 , , , , , , , , , , , ,

Redesigning & Remodeling Can Open Up Your Floor Plan!


Open floor plans are one of the most desirable features in homes today. In fact, many of the remodeling and design shows on TV feature knocking out walls, adding support beams, and changing up the whole floor plan, making it feel open and spacious. Sometimes it makes you think, “Can I do that to my home?”

Open layouts provide a welcoming space that doesn’t feel cramped or cluttered. Unfortunately, some homes simply don’t have the open space that you might desire. But, there is good news! You might be able to remodel or redesign the space in your home so that you can have the open plan that you want.

Idea #1: Remove unnecessary walls.
If you have walls in your home that aren’t supporting or load-bearing walls or ones that don’t cover plumbing pipes, you may be able to take down the walls and combine the space to make the area feel bigger. After all the necessary permits are in place, this is a pretty simple task for construction companies, as they simply will need to knock out the wall and rewire any electrical lines that need to be adjusted. Even if a whole wall isn’t removed, even partial wall removal might be an option to help open up the space.

Idea #2: Paint, paint, paint.
Even though you might love that dark purple color, it might not be the best choice to lighten up the room.  Choosing lighter colors for your walls and floors can make your home look and feel bigger. So, when choosing colors, keep in mind the size of your room. In addition, be sure that the paint color, and furniture colors flow together from room to room, in addition to using matching or similar flooring throughout the home. If these things don’t flow, the space might be made to feel choppy rather than fluid and open.

Idea #3: Add more light.
Adding more natural light is a fantastic way to make the rooms feel brighter and bigger. Add French doors or a sliding door at the back of your home. Or, consider installing skylights or new bigger and brighter windows in your rooms to bring in more light. When it comes to window coverings, avoid bulky curtains and instead, consider adding fabric blinds or lighter sheer drapes so the space doesn’t feel heavy or too dark.

Your home should be your retreat space, so making it feel warm and inviting is important and these projects are often affordable and won’t cause you to dip into your savings account too much!

Posted on March 2, 2015 at 5:20 pm
Nancy Johns | Category: Home Remodeling Tips | Tagged , , , , , , , , , , , , , , , , , , ,

Ideas for Winter Curb Appeal

Brrrr….it’s cold outside!  The cold winter months are now upon us! During the summer months, it’s easier to keep your yard and garden looking great, but in the winter, the idea of getting outside to do yard work is not an inviting one. If your home is on the market, it’s important to remember that if you neglect the exterior, then you may be at risk for deterring prospective buyers. Instead, keep it looking warm and inviting! Be sure that the leaves are raked on a regular basis and mow and edge the lawn regularly so it doesn’t get unkempt and overgrown. If the house is vacant, keep newspapers and other flyers off the porch and be sure to keep the heat at 65 degrees so the house isn’t cold when it is being shown to potential buyers.

Looking for some other ways to create curb appeal in the winter? It doesn’t require a lot of money or complex changes. It just requires a little bit of effort.

Add color: In the dead of winter, color is often lacking. So, add some plants that will survive the winter, such as evergreens or hearty plants that can add a splash of color to the winter landscape. Add some planters filled with evergreen plants and put them by the door. Or add a nice wreath to the door.

Keep paths clear: If your pathways to the home are icy or snowy, be sure to make it as non-slippery and clear of snow/ice as possible. Pour salt on the area and be sure to keep things clear so it is safe. In addition, if the area is cleared, it also gives buyers a good idea of the true size of the area.

Sparkle and lights: Some of most inviting homes have a special seasonal sparkle. Add some simple sparkling lights to the exterior of the home, either with Christmas lights, or some nice lights that line the walkway or driveway to the home. Or, if you have a bird bath, fountain, or other area that goes unused in the winter, consider transforming that area into something else for a few months – maybe add a planter or an outdoor sculpture with some lights to that area instead. In addition, because it gets dark early during the cold winter months, be sure that there is plenty of lights around the home. Be sure that your flood lights or porch lights are in good working order and keep some lights on in the exterior of the home as well.

A drab and dreary winter doesn’t have to wreck the curb appeal on your home. With quality landscaping and a little bit of creativity and effort, your yard can shine even during the coldest part of the year!

Posted on December 1, 2014 at 4:59 pm
Nancy Johns | Category: Home Remodeling Tips | Tagged , , , , , , , , , , , , , , ,