Mortgage Insurance: Protecting Your Home Investment

Mortgage insurance is designed to protect lenders from the risk of default and foreclosure. It's typically required for borrowers who make a down payment of less than 20% of the home's purchase price.

Benefits of Mortgage Insurance

• Enables Homeownership: Allows borrowers to purchase a home sooner without saving for a large down payment.
• Flexible Payment Options: Premiums can be paid monthly, annually, or as a one-time upfront fee.

Drawbacks of Mortgage Insurance

• Additional Cost: Increases your monthly mortgage payment and overall cost of the loan.
• Not Deductible: Premiums are not tax-deductible on federal tax returns as of current tax laws.

Conclusion

While mortgage insurance adds to the cost of your monthly mortgage, it makes buying a home more accessible. Understanding when and how you can cancel mortgage insurance can save you money over the life of your loan.