Don’t Have Enough for a Down Payment? Try Mortgage Insurance

For many would-be homeowners, coming up with a down payment that’s 20 percent of the home loan they want just isn’t possible. And most lenders view a down payment below 20 percent as a sign that the prospective home buyer is a high risk. However, rather than not giving the buyer a loan, a lender may offer an alternative: mortgage insurance.

Mortgage Insurance Basics

Travis Saling, a loan officer with Team Home Loans in California, likens mortgage insurance to auto insurance. With auto insurance, everyone pays into a pool each month. If a customer gets into a wreck, the insurance company uses the pooled funds to cover the cost of repairs. With mortgage insurance, you’ll also pay into a pool to help the lender cover losses and costs if a homeowner defaults on their loan. Mortgage insurance also helps the lender offset risks and allows them to make loans to buyers with smaller…

View original post 367 more words


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s