Lender Paid Mortgage Insurance For Las Vegas Loans

Mortgage insurance is often part of a loan when a owner puts less than twenty percent down of the value of a property. It protects lenders against loss when a homeowner fall short of paying a loan. Even though it protects the lender, it is normally paid by the homeowner as a closing cost and additional monthly fee. In certain cases, a mortgage company will cover the cost of the mortgage insurance. This blog provides an overview of lender paid mortgage insurance for Las Vegas loans.

An Overview Of Lender Paid Mortgage Insurance

Some lenders will offer lender paid mortgage insurance loan options in exchange for an increased interest rate. When a buyer pays mortgage insurance themselves, it stays in effect while the loan amount exceeds eighty percent of the purchase price or current market value. So at some point, the monthly payment is lowered when mortgage insurance is no longer applicable. With lender paid mortgage insurance loans, this drop in monthly payment does not take place since the higher interest rate continues for the life of the mortgage. The only means to change it is to refinance.

The Difference Between Owner Paid and Lender Paid Mortgage Insurance

Although the interest rate on lender paid mortgage insurance loans may be higher, it might still lead to a lower monthly payment for certain buyers. Additionally, mortgage insurance may not be tax deductible for buyers whose income is higher than certain IRS limits whereas mortgage interest is usually tax deductible. Therefore, selecting a higher interest rate and lender paid mortgage insurance might also result in greater tax savings for some buyers.

Assistance with Las Vegas Loans

Lender paid mortgage insurance options may be a better option for certain types of buyers. It is important to analyze the advantages and understand the short term and long-term differences. The above is an overview of lender paid mortgage insurance for Las Vegas loans and is intended only as an introduction. For a list of experienced local mortgage companies, contact Arina Hanciulesco