What is Mortgage Insurance?

Mortgage insurance is just that, insurance taken out on the mortgage. It is mainly used for FHA loans where there is little down and the banks want to cover their assets enough in case the buyer fails to pay the mortgage. [Learn more about which mortgage is right]

Mortgage insurance is a small amount tacked onto the mortgage payment each month. Once the equity in the home is high enough to cover incase the buyer defaults, typically 20% higher than the balance, the mortgage insurance can be removed.

Here's the ticker though: It will typically not be removed automatically. The homeowner must call and request it to be removed. This can cause buyers to pay much more than they have to for years sometimes all because they were not aware of the extra payment. It typically takes about 2 years for the mortgage insurance to become null so if you are a homeowner check with your lender occasionally to see if it can be taken off.

Mortgage insurance is not a lot of money each month and may only be about $50-$100 but that can certainly add up. Don't let the banks have anymore of your money if you don't have to. You are already paying quite a bit in interest over the life of the loan.

For more tips on mortgage payments, interest or to obtain a loan, please contact our offices. We have agents ready to help buyers of all Methow Valley real estate and resources for loans, inspections and appraisals.

Other Useful Sites:  Century 21 Premiere is your local source for all Durango homes and real estate. We offer buyers and sellers information on Durango real estate and all Durango homes for sale.. Remax Sedona is your guide to all Sedona AZ real estate, Sedona homes and properties including mortgage, finance, buyer and sellers information.