How to protect your mortgage with insurance?
- Ricky Gandhi
- Jul 27, 2023
- 2 min read
Table of Contents
Introduction
What is mortgage insurance?
Types of mortgage insurance
How to choose mortgage insurance
The cost of mortgage insurance
How to get mortgage insurance
Conclusion
Introduction
Buying a home is a big financial decision, and it's important to protect your investment. One way to do this is to get mortgage insurance. Mortgage insurance can help protect your family if you die or become disabled, and it can also help you get a mortgage if you don't have a large down payment.
In this blog post, we will discuss what mortgage insurance is, the different types of mortgage insurance, how to choose mortgage insurance, the cost of mortgage insurance, and how to get mortgage insurance.
What is mortgage insurance?
Mortgage insurance is a type of insurance that protects your lender if you default on your mortgage. If you die or become disabled, your mortgage insurance will pay off the remaining balance on your mortgage, so your family won't have to worry about making the payments.
There are two main types of mortgage insurance: private mortgage insurance (PMI) and government-backed mortgage insurance (FHA). PMI is typically required if you put down less than 20% on your mortgage. FHA mortgage insurance is available to all borrowers, regardless of the size of their down payment.
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Types of mortgage insurance
There are two main types of mortgage insurance: private mortgage insurance (PMI) and government-backed mortgage insurance (FHA).
Private mortgage insurance (PMI) is typically required if you put down less than 20% on your mortgage. PMI premiums are paid monthly, and they are typically added to your mortgage payment.
Government-backed mortgage insurance (FHA) is available to all borrowers, regardless of the size of their down payment. FHA mortgage insurance premiums are also paid monthly, but they are typically lower than PMI premiums.
How to choose mortgage insurance
There are a few factors to consider when choosing mortgage insurance:
The size of your down payment: If you put down less than 20% on your mortgage, you will likely need to get PMI.
Your credit score: Your credit score will affect the cost of your PMI premiums.
The type of mortgage you have: If you have an FHA mortgage, you will need to get FHA mortgage insurance.
The cost of mortgage insurance
The cost of mortgage insurance varies depending on the type of mortgage insurance you get, the size of your down payment, and your credit score. PMI premiums typically range from 0.5% to 1.5% of the loan amount. FHA mortgage insurance premiums are typically lower than PMI premiums.
How to get mortgage insurance
You can get mortgage insurance through a mortgage lender. When you apply for a mortgage, your lender will be able to tell you if you need mortgage insurance and what type of mortgage insurance you qualify for.
Conclusion
Mortgage insurance can be a valuable way to protect your family and your investment. If you are considering buying a home, be sure to talk to your lender about mortgage insurance.
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