How to Avoid Monthly Mortgage Insurance through your local lender.
Most consumers looking to purchase a property are under the impression that if they put less than 20% down for the purchase of their new home, they will be required to pay monthly mortgage insurance. This is a common misconception that is more than likely told to them by an uneducated loan officer. The truth is you can avoid paying monthly mortgage insurance purchasing a new home putting less than 20% down by utilizing a program known as "Borrower-paid single premium mortgage insurance".
Borrower-paid single premium mortgage insurance is a lump sum the borrower can pay at closing to avoid paying monthly mortgage insurance.
This program will typically provide benefits such as
- Lower monthly mortgage payment
- The buyer is able to afford a higher-priced home due to their debt-to-income ratio being lower
- The consumer will never have to worry about refinancing to remove the monthly mortgage insurance
- The builder or seller is allowed to pay the single premium if negotiated
Make sure to ask your lender about this money-saving program.
Written by Tim Borsa, Branch Manager