Mortgage insurance is viewed nearly universally as a bad thing, but in reality, it’s a tool to be used that is very good for home buyers, the housing market and the economy in general.
Why do many complain about mortgage insurance? Because it’s expensive, and sometimes difficult to get rid of when it’s no longer necassary. If that’s the case, why do I say it’s good for buyers and the economy? Because it’s a tool that allows people to buy a home with less than twenty percent down.
Mortgage insurance insures the lender against the risk of the buyers default on the loan. It does NOT insure the buyers life, like many people think.
The single biggest hurdle for home buyers is accumulating an adequate down payment. Lenders want buyers to put twenty percent down for two reasons. First, a buyer with a large down payment is less likely to quit making their payments. Second, if a buyer does default, the more the buyer put down usually means more equity in the house when the lender forecloses, which means the lender loses less money.
But, if a buyer wants to buy a $200,000 and has to put up a twenty percent down, that will equal a $40,000 down payment! Hard to save up, for most buyers. BUT, with the use of mortgage insurance, that buyer might be able to put as little as $6,000 down! A lot easier to save.
So, mortgage insurance can be a very benficial tool.
With that being said, don’t let your lender shoehorn you into only considering monthly mortgage insurance. There are other options such as single premium mortgage insurance, or “split” mortgage insurance. These programs can be more expensive up front, but sometimes much less expensive over time. They don’t work for everyone, but they certainly should be looked into.
Whether you’re looking to buy a home in New Jersey, New York, Carolina, Texas or anywhere in the United States of America, you have to inevitably take out a mortgage loan to finance the property. Apart from the ultra-rich people, no one is able to finance their own property with their funds as this requires a huge amount of money. For all the laymen who come from mediocre families, taking out a mortgage loan is the only option left. If you’re a first-time homebuyer, you must not be aware of the basics of taking out a home mortgage loan. If you don’t choose a loan within your affordability, it is most likely that you have to take out a loan in the near future after paying all the closing costs and other fees. Its better you take the required steps before. Read on to know some basic facts that are taken into consideration by your lender while lending you a loan.
1. Your credit score: The most vital fact that is taken into consideration by the mortgage lenders is your credit score. You’re entitled to take out a free copy of your credit report from any of the three credit reporting agencies and by doing this you can easily take the steps to boost your score before applying for a home mortgage loan. With an exceptionally good credit score, you can grab the best mortgage loan in the market and thereby save your hard-earned dollars.
2. The amount of loan you can afford: This point is to be taken into consideration by you so that you don’t overstretch yourself while getting yourself a mortgage loan. Take out a loan within your affordability so that you don’t have to burn a hole in your pocket while repaying the loan. Consider all the other factors needed to determine the amount of loan that you can afford.
3. The total income earned by you in a month: The gross monthly income that you earn in a month is another important document that is checked by the lender so that he can determine whether or not you can repay the loan on time after managing all your other debt obligations that you owe. If you want to secure a lower interest rate on the home mortgage loan, you should boost your income in a month and then apply for the loan.
Apart from the above mentioned factors, the mortgage lenders take the debt to income ratio into account as they also need to see whether or not the borrower can make timely payments on the home mortgage loan. Manage your personal finances so that you don’t have to opt for refinance in the future.
This house really caught my eye from the moment I stepped on the front porch. Here is a photo gallery of pics I snapped with my phone while I toured the house with Joe:
The owners have taken great care in restoring and remodeling this house, with a great mix of classic and modern elements. Joe even told me how much time he spent filling the original posts on the porch, and it is a lot!
Financing for 5775 Ne Garfield
There are a range of home loan options available for this property. As I said in the video, it does qualify for FHA financing, which has flexible credit guidelines and financing for up to 96.5% of the home’s value. To learn more about financing this property, or any other in Oregon and Washington, feel free to contact me at 503.799.4112 or email firstname.lastname@example.org
You can learn more about this great home at the following website: