From the category archives:

Mortgage Insurance

September 27, 2009

Homeowners Insurance

Homeowners Insurance is not only an essential support for you as a homeowner, it is also an unavoidable part of a mortgaging process. You are required to have homeowners insurance on the property you are mortgaging, no mortgage will close without it. The lenders’ concern is obvious – your property is the collateral of their [...]

January 23, 2009

How can I make FHA assume responsibility for the flaws in the property discovered after their inspection?

I don’t believe you can. A little consolation is that you are not the only one. The purpose of the FHA house inspection has been misinterpreted by generations of homebuyers all through the years. The FHA only insures your mortgage; it does not guarantee the flawlessness of the property being bought. They do conduct an [...]

January 22, 2009

Can first-time homebuyers get a discount on the upfront FHA insurance premium?

This whole issue was eliminated by the FHA Modernization Act of 2008 (within the Housing and Economic Recovery Act of 2008), or rather suspended for the period starting October 1, 2008 through September 30th, 2009. Before September 30, 2008 first-time homebuyers with credit score below 559 and LTV above 95 were eligible for a reduction [...]

January 21, 2009

What’s the difference between an FHA mortgage insurance and PMI?

The FHA insures only a limited range of mortgages provided by FHA-approved lenders. PMI insurers service mortgages of the conventional market. PMI is required if a homebuyer borrows more than 80% of the property’s purchase price in one loan; the FHA insurance is required for any FHA mortgage, irrespective of the size of the down [...]

January 16, 2009

How much home purchase money can I borrow from the FHA?

The short answer is none. I am serious. The thing is that the FHA does not lend you the money. The so-called FHA mortgages are in fact the FHA-insured mortgages. The FHA insures your mortgage to protect the lender in case you default on your payments. It is sort of like PMI, but the rules [...]

January 15, 2009

I hear the FHA pays the insurance premiums back?

It is certainly true, but not every FHA-insured borrower is eligible for this refund; even those who are, cannot get all the money paid as insurance premiums back Normally, if you are eligible you receive a check or an application within 45 days after you paid off your loan. Your mortgage company sends HUD a [...]

January 12, 2009

FHA-Insured Mortgages

There has been a lot of change in probably the most liberal until recently mortgage offer – the FHA-insured mortgage. Are you confused by the middle word in the title? Well, it is there rather to clarify any possible confusion or misunderstanding that FHA mortgages (that’s how they are called a lot more often) usually [...]

September 12, 2008

How come my monthly payment has shrunk, while the rate has increased?

I can think of three reasons for that. One of them or any combination of them could result in such an illogical at first glance situation: • You made an extra payment towards the principal some time ago and now it’s taking effect. The balance has become so low, that even a higher rate cannot [...]

August 13, 2008

What is the minimum down payment required to buy a home?

Actually, there is no limit to the size of a down payment. It can even be 0% with certain kinds of mortgages, but you have to be able to qualify for it. Another tricky part here is the Mortgage Insurance. If your down payment is lower than 20% of the purchase price (or the appraised [...]

August 1, 2008

How to avoid PMI or get rid of it sooner?

A borrower has to pay Private Mortgage Insurance (PMI) only if he cannot make a 20% down payment. So, the ways to avoid the insurance are the ways to find enough cash to be able to pay at least 20% of the price of the property in question. Nowadays, the following options are available: a [...]

February 22, 2008

Piggyback Mortgage (80/20 Mortgage)

Piggyback mortgages were quite popular before the year of 2007 as a tax deductible alternative for conventional PMI premiums. 2007 broke this subtle balance as Congress made PMI premiums tax deductible, too, but for that one year only. Being limited to certain restrictions and so far unpredictable future, PMI still leaves some room for the [...]

February 20, 2008

Lender-Paid Mortgage Insurance (LPMI)

Lender-Paid Mortgage Insurance (LPMI) is one of the ways, along with the Piggyback loan, to avoid the notorious conventional Private Mortgage Insurance (PMI) if you borrow more than 80% of the purchase price while buying yourself a home. To be perfectly honest, you, as the borrower, are the one to pay this insurance anyway. The [...]

February 19, 2008

Private Mortgage Insurance (PMI)

If you are sure, that you will be able to put down at least 20% of the property purchase price, don’t bother to read this article – there is no way any lender should make you pay this insurance. Mortgage insurance is something that happens to you only if you cannot make a 20% down [...]