Mortgage Insurance Simple Answers: Part 1

Mortgage Insurance Simple Answers: Part 1

money_clothesline.jpgWhat is Mortgage Insurance?
Mortgage Insurance helps borrowers (majority first time home buyers)realize the dream of Homeownership sooner by enabling them to purchase a home with less than a 20% down payment. Mortgage insurance provides financial protection for lenders and investors if a homebuyer defaults on a mortgage loan.

With this protection, lenders can offer more low down payment mortgages to homebuyers – with as little as 5%, 3%, or even no money down instead of the traditional 20%.What are the Benefits of MI?
The benefits of mortgage insurance are numerous. Mortgage insurance can help a homebuyer qualify for a home with a lower down payment, buy the home sooner, stop paying rent faster, and claim more tax-deductions. Of course, buying a home sooner accelerates building equity and longer-term benefits of homeownership. Even if the homebuyer can make a 20% or more down payment, using mortgage insurance to put less money down potentially makes money available for investments, home improvements, vacations or education.

Additionally, a loan with mortgage insurance offers:
· Competitive Monthly Payments – now as affordable as or cheaper than most combo loans
· Predictability – payments aren’t rate sensitive like many exotic or combination loans
· Tax Deductibility* – Mortgage Insurance is now tax deductible!
· Cancelability – as soon as the loan-to-value and lender requirements are met
· Simplicity – one loan instead of two

Part 2: Is Mortgage Insurence Tax Deductable

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