{"id":6447,"date":"2024-04-25T17:00:36","date_gmt":"2024-04-25T21:00:36","guid":{"rendered":"https:\/\/mortgageequitypartners.com\/ma-methuen\/?p=6447"},"modified":"2024-04-25T14:15:54","modified_gmt":"2024-04-25T18:15:54","slug":"do-i-need-mortgage-insurance","status":"publish","type":"post","link":"https:\/\/mortgageequitypartners.com\/ma-methuen\/do-i-need-mortgage-insurance\/","title":{"rendered":"Do I need mortgage insurance?"},"content":{"rendered":"<p><img decoding=\"async\" class=\"size-full wp-image-6450 alignnone\" src=\"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-content\/uploads\/2024\/04\/House-with-Green-Lawn.jpg\" alt=\"House with Green Lawn\" width=\"1200\" height=\"802\" srcset=\"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-content\/uploads\/2024\/04\/House-with-Green-Lawn.jpg 1200w, https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-content\/uploads\/2024\/04\/House-with-Green-Lawn-300x201.jpg 300w, https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-content\/uploads\/2024\/04\/House-with-Green-Lawn-1024x684.jpg 1024w, https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-content\/uploads\/2024\/04\/House-with-Green-Lawn-768x513.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h2>What is mortgage insurance?<\/h2>\n<p>Mortgage insurance, or MI, gives eligible Massachusetts homebuyers the flexibility of making a smaller down payment by lowering the risk to the lender originating the loan. Without mortgage insurance protection, lenders normally require a borrower to make a down payment of at least 20% of the home&#8217;s sales price. Many <a href=\"https:\/\/mortgageequitypartners.com\/ma-methuen\/loan-programs\/first-time-homebuyer\/\">first-time homebuyers<\/a> struggle to save up that much money. With MI, down payments can be as low as 3% for those who qualify, making buying a home possible. If you don&#8217;t want to wait to buy your dream home, you can get a low down payment option loan using MI.<\/p>\n<h3>What kind of mortgage insurance is available?<\/h3>\n<ol>\n<li>LPMI &#8211; Lender Paid Mortgage Insurance describes a scenario where your mortgage lender covers the cost of your mortgage insurance. Lender-paid mortgage insurance builds the cost of covering your insurance into the mortgage rate.<\/li>\n<li>BPMI &#8211; Borrower Paid Mortgage Insurance is a monthly premium added to your mortgage payment purchased through a third-party vendor specializing in mortgage insurance.<\/li>\n<\/ol>\n<h4>Benefits of LPMI include:<\/h4>\n<ul>\n<li>The extra mortgage interest LPMI lenders charge might be less than a comparable monthly mortgage insurance premium.<\/li>\n<li>If you itemize your deductions on your tax returns, you can deduct the cost of the increased interest lenders charge you for covering LPMI through the mortgage interest deduction*.<\/li>\n<li>Your monthly payment might be more affordable because the cost of the mortgage insurance is spread out over the entire loan term.<\/li>\n<li>Lender Paid MI is only cancelable if you sell the home or refinance into a new loan with at least 20% equity.<\/li>\n<\/ul>\n<h4>Benefits of BPMI include:<\/h4>\n<p>One key benefit of Borrower Paid MI is that it cancels once a borrower has built enough equity, resulting in lower monthly payments over time.<\/p>\n<p>For borrower paid MI, the <a href=\"https:\/\/www.consumerfinance.gov\/compliance\/supervision-examinations\/homeowners-protection-act-hpa-or-pmi-cancellation-act-examination-procedures\/\" target=\"_blank\" rel=\"noopener\">Homeowners Protection Act (HPA) of 1998<\/a> requires lenders to cancel MI when the loan amortizes to 78% of the home&#8217;s original value, subject to certain conditions. One condition is that the borrower must be current on their mortgage payments.<\/p>\n<p>Additional requirements to cancel BPMI include:<\/p>\n<ul>\n<li>The value of the property has not declined below the original value.<\/li>\n<li>The borrower&#8217;s equity is not subject to a subordinate line.<\/li>\n<\/ul>\n<p>Consider your buying power if you have $20,000 for a down payment and your income supports a larger loan amount.<\/p>\n<table>\n<tbody>\n<tr>\n<th width=\"208\">Without MI<\/th>\n<th style=\"text-align: center;\" colspan=\"2\">With MI<\/th>\n<\/tr>\n<tr>\n<td width=\"208\">You can make a 20% down payment on a home valued at $100,000<\/td>\n<td width=\"208\">You can make a 10% down payment on a home valued at $200,000<\/td>\n<td width=\"208\">You can make a 5% down payment on a home valued at $400,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>To figure out which option is best for you, <a href=\"https:\/\/mortgageequitypartners.com\/ma-methuen\/our-team\/\">contact one of our loan officers<\/a>. If you&#8217;re determined to buy a Massachusetts home sooner rather than later and can&#8217;t afford the standard down payment, lender-paid mortgage insurance can help you. But carefully consider how long you plan to stay in your home and the long-term cost of a loan with a higher interest rate before settling on this option. In some cases, borrower-paid mortgage insurance could be a better choice.<\/p>\n<p><em>*For tax advice, contact a tax accountant or other professional.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is mortgage insurance? Mortgage insurance, or MI, gives eligible Massachusetts homebuyers the flexibility of making a smaller down payment by lowering the risk to the lender originating the loan. Without mortgage insurance protection, lenders normally require a borrower to make a down payment of at least 20% of the home&#8217;s sales price. Many first-time [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":6451,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[6,4],"tags":[],"class_list":{"0":"post-6447","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-articles","8":"category-news","9":"entry"},"_links":{"self":[{"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/posts\/6447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/comments?post=6447"}],"version-history":[{"count":0,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/posts\/6447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/media\/6451"}],"wp:attachment":[{"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/media?parent=6447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/categories?post=6447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mortgageequitypartners.com\/ma-methuen\/wp-json\/wp\/v2\/tags?post=6447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}