Do you know what to expect when it comes to mortgage insurance as you work to become pre-approved for a home loan and eventually secure your home loan from a loan officer?
In my last blog post, I touched on the basics of home loan insurance (read here!). In that post, I explained that you are required to have mortgage insurance with conventional financing unless the purchase includes 20% down, or is on a refinance with 20% equity. However, some lenders may require it even with 20% down!
An important aspect of mortgage insurance to note is that once you’re at 80% loan to value (ex: $160,000 loan, $40,000 equity on a house valued at $200,000) you can call or write to request the mortgage insurance be removed on certain loan types. Other mortgage insurance might potentially fall off automatically when you’re at 78% loan to value.
There are life-of-the-loan mortgage insurance plans with certain lenders. Be sure to reference your Truth in Lending Act (TILA) document as well as your amortization schedule, as those two documents will give you the exact dates as to when the 78% automatically happens or when you have the opportunity to make that request at 80%, if it applies to your loan type.
Tax advantages may be present in one type of mortgage over another. It’s your lender’s responsibility to shop multiple mortgage insurance companies, which I always do for my clients. Know your options and ask the right questions of your lender before making your decision.
Have questions? We have answers! Call our office at 985-300-LOAN or contact me through my website HERE.
Stay tuned to my blog for additional information and tips on securing a home loan!
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