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

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

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6
Stefanie Coh…, Agent, Weston, FL
Sat Jun 30, 2012
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
Beate Rodrig…, Mortgage Broker Or Lender, Sunrise, FL
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
Tchaka Owen, Agent, Fort Lauderdale, FL
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
Ann Ryan, Agent, Doral, FL
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
Ron Thomas, Agent, Fresno, CA
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
Mikel DeFran…, Agent, Canton, MA
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!
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