Home Buying in 33020>Question Details

Dopnlu2, Home Buyer in Fort Lauderdale, FL

what are the pro's and con's of mortgage insurance?

Asked by Dopnlu2, Fort Lauderdale, FL Sat Jun 30, 2012

Help the community by answering this question:

Answers

6
The pro, is that it gives purchasing power to millions of Americans, who don't have enough cash to make a 20% down payment. The con is that you have to pay the premium.

So many people are thrilled to be able to purchase a home with less than 20% down payment, so that is is big plus!

Best regards,
Stefanie Cohen, PA, ABR, SFR
Prudential Florida Realty
0 votes Thank Flag Link Sat Jun 30, 2012
Hello,

Tchaka and James couldn't have said it better.

Option 1: You put less than 20 % down - You have to pay 1.75 % of Sales Price for the upfront Mortgage Insurance and 1.25 % of the Loan Amount (divided by 12 month) for the monthly Mortgage Insurance.

Option 2: you put 20 % down and you do not have to pay any Mortgage Insurance.

Please feel free to contact me at your earliest convenience, if I may be of any service to you.

Best Regards,
Beate Rodriguez
Lic. Loan Originator
NMLS# 299244

Beate.Rodriguez@HGFLoans.com
Cell: 954.695.4849
0 votes Thank Flag Link Sat Jun 30, 2012
There isn't a pro or con per se...........rather, you WILL pay mortgage insurance if you put down less than 20% and you won't if you put down at least 20% when purchasing a home.

it's not something you have the option to add to your mortgage if you want.

My input: if you have enough of a downpayment to avoid it, then do so. No need to pay extra to someone else.

Tchaka Owen
Keller Williams Realty Professionals
954.552.6112
0 votes Thank Flag Link Sat Jun 30, 2012
The biggest pro of PMI is that it has allowed millions of Americans to purchase homes without a 20% downpayment.

The con is that it costs money... and if you can afford to get a conventional mortgage, right now, you can actually get a lower interest rate, and save 1000s over the cost of the loan.

Ann
0 votes Thank Flag Link Sat Jun 30, 2012
Don't be confused;
There are two types of MORTGAGE INSURANCE:

There is PMI which is the Insurance that YOU have to pay for, that protects the LENDER if you default. This is generally required if you have a loan with less than 20% equity.

You may also get your own insurance, through a regular Life Insurance Company, that will pay off your mortgage in the event of death or disablement.

Good luck and may God bless
0 votes Thank Flag Link Sat Jun 30, 2012
There is a Pro to the bank in that they get some protection if you default. The Con is that you pay it and the bank makes you as a condition of lending you the $$ !
Wish I had better news! Actually, there is a good Pro for you, once you've paid down the principal then it will go away for good... so that's a positive!
0 votes Thank Flag Link Sat Jun 30, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer