Benefits of Mortgage Insurance

By
Real Estate Agent with Ultra Real Estate Dallas Fort Worth

 

A client recently told me that she absolutely hates PMI or MI and will avoid it at all cost even if it means she has to wait to purchase a home.  Here’s my thought, before you write off mortgage insurance, let’s look at how it may provide valuable opportunities and options to you as a homebuyer.

 

  • Increased buying power. Say you’ve saved $20,000. You can use that cash to put 20% down on a $100,000 home OR you could make a smaller down payment on a more expensive home (bigger and nicer) — for example, 10% down on a $200,000 home.

 

  • Expanded cash-flow options. Using MI to finance your mortgage, you can elect to put less money down and still have funds for home-related purchases and repairs or investments. For example, rather than putting 20% down ($40,000) on a $200,000 home, you could put down 10% ($20,000) and use the other $20,000 to remodel.

 

  • Lower monthly payments. If you have good credit, you may be eligible for lower borrower paid MI rates (Conventional).

 

  • Predictable monthly payments. A fixed-rate mortgage with MI provides you with a locked-in monthly payment that will not increase and that will be reduced when MI coverage is cancelled (Conventional).

 

  • Mortgage insurance may be cancelled. On Conventional loans with MI, coverage must automatically be cancelled by the lender when the loan reaches 78% of original value through amortization. MI also may be cancelled when extra payments bring the loan below 80% of original value (Conventional loans).

 

  • MI is tax deductible-  Every year Congress decides whether PMI is tax deductible- For the past few years, it has been!  It’s a great write off!

 If you are looking to sell or purchase a home in the Dallas area, feel free to reach out to me. As an experienced real estate agent, I will sit down with you and discuss your real estate needs. Together we will work as a team to reach your real estate goal!

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Topic:
Home Buying
Location:
Texas
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Dallas Real Estate
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Tags:
pmi
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mortgage insurance
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susie kay
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Rainmaker
3,145,108
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Susie Kay Those are very good tips for benefits of mortgage insurance.

Aug 14, 2017 05:18 PM #1
Rainmaker
6,041,183
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good advice to share with prospective home buyers.

Aug 16, 2017 03:17 AM #2
Rainmaker
4,798,978
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good morning Susie.  Folks should be grateful that they can qualify for loans with little or no down payment.  By, saving, they can eventually eliminate these fees.

Aug 16, 2017 04:50 AM #3
Ambassador
3,985,919
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Susie, this may be the only way some buyers may be able to buy and finance. You did a really good job explaining why it is not a bad thing.

Aug 16, 2017 06:29 AM #4
Rainmaker
1,283,967
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Saw your post shared over at Debbie Reynolds' blog, Susie Kay.  It's so important to find an agent and LO that can help guide you in this matter regarding Mortgage Insurance.  An LO can work the numbers up so an honest comparison of costs can be made between buying with Mortgage Insurance now and saving for a future purchase.  The numbers don't lie ...

Gene   

Aug 18, 2017 01:12 PM #5
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Rainmaker
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Susie Kay

North Dallas Specialist
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