Mortgage Insurance – Examine Your Options

Buyers looking to finance the purchase of a home who don’t have at least 20% down will almost assuredly be paying mortgage insurance of some sort. However, not too many buyers unless they’re savvy investigate their options surrounding mortgage insurance. If a buyer plans to spend many years in a property it can often be beneficial to pay mortgage insurance up front rather than monthly. Now, many buyers may want to save their cash or are limited on cash anyway, particularly with the many other expenses that arise when buying a house and moving. However, devising a strategy prior to a purchase can allow the buyer to have the mortgage insurance paid for them.

One of the ways this can happen is through the purchase itself with the seller contributing towards the buyers closing costs. It’s not uncommon for sellers to contribute money towards closing costs in a transaction but many buyers to think to put this towards paying a one-time mortgage insurance payment. Even paying a slightly higher purchase price to achieve this goal can be more beneficial. Paying a one-time mortgage insurance fee can often have a bigger impact than even paying a discount point for a lower rate. Again, it’s crucial to speak with a lender to look at multiple scenarios to see which makes sense overall at the end of the day given the entire scope of a buyer’s finances. Another option along those lines is to have the lender pay it for you. Most lenders will pay this cost but the interest rate you’ll receive will be higher. However, it often can work out that your monthly payment is actually lower with the higher interest rate, so work the scenarios to see what fits best.

These are several reasons why using a knowledgeable lender and real estate agent can pay off. Having these professionals work collaboratively together can pay big dividends or more accurately, can have you paying less for your home each month.

Stephen Woodall
REALTOR, GRI @ Long Realty Company
Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.

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