PMI Mortgage Insurance – What is it and is it Necessary?
The cost
The premium for PMI insurance varies according to the size of the loan, and the down payment made, but is typical around one percent of the loan amount. The cost is not based on the lender’s credit score but is based on the size of the mortgage and the amount of the down payment.
When it is necessary
If a home buyer cannot afford to make a large down payment, typically at least twenty percent, to purchase a home, purchasing PMI insurance allows the buyer to pay as little as five percent down. In certain cases, the buyer is allowed to purchase the home with no money down. For a lender who has bad credit, PMI insurance may be required even if the loan-to-value ratio is less than eighty percent. A foreclosure on a previous home may also prompt the lender to require PMI insurance be purchased. For borrowers with no prior foreclosures and for those who have good credit; there is no need to purchase PMI insurance if the loan-to-value ratio on a home is less than eighty percent.
How to avoid paying PMI mortgage insurance
PMI insurance is added into the mortgage payments when a house is financed and can make monthly mortgage payments significantly higher. There are a few ways to go about
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With the inflated real estate market, it is often the only option many home owners have of obtaining an affordable down payment option and achieving their dream of home ownership. PMI insurance premiums are now tax deductible, as is mortgage interest. The itemized deduction for private mortgage insurance is for homeowners who earn up to $109,000 per year. The additional cost of PMI insurance also makes the mortgage payments higher. On the downside, a homeowner may find it difficult to get the mortgage balance down to eighty percent of the loan and end up paying PMI insurance for many
A major funding agency that home buyers should take advantage of is the Federal Housing Administration, also known as the FHA. FHA provides mortgage insurance on housing loans that are funded by FHA approved lenders. The FHA will insure loans on single and multifamily homes located within the U.S. and its territories. The Federal Housing Administration is known worldwide for being the largest insurer for residential loans.
Mers eliminates a county’s recording fee which is an average of $35. According to ThisMatter.com, Mers’s records contain 50% to 60% of the residential mortgages in the United States. However, companies who affiliates with Mers pays Merscorp membership fees and per transaction fees for access to the Mers database. Consumers should be careful with their mortgages, promissory notes, and know who or what rightfully has their title. Mers has a webpage for homeowners or anyone who may have questions about the mortgage. It provides series of actions for disputing any information in a Mers record. Although, Mers is vague on how a borrower would have knowledge on what was in their record. Mers is leaving borrowers clueless on who to talk to when they are having problems with their loan. Furthermore, Mers hurt many consumers financially because it was a major influence on the foreclosure crisis. Merscorp were allowing the original loan holders to pass their credit default risk to investors of securitized loans. Lenders were lending to risky borrowers, however, borrowers were being told that they can afford this loan when in reality they could not. As, a consumer it is important to know when a product seems too good to be true, because it usually is and be alert when a company says no down payment until a certain date. On top of that the mortgage companies and banks were not getting back their
On March 10, 1937, Joseph Lewis and Jack Green started Progressive Mutual Insurance Company. They wanted to provide vehicle owners with security and protection and they thought an insurance company was a good investment for a couple of lawyers who were just getting started. Since its beginning, Progressive has taken an innovative approach to auto insurance. They offered drive-in claims service before any other auto insurance company and in another industry first, they allowed customers to pay their premiums in installments. An appealing option for those who could not afford annual payments. Progressive wanted and still wants to make auto insurance accessible and easy so more people could protect their vehicles.
...ional. In addition, some of the money will be needed to hire a home inspector before the house is put on the market. The cost of this service varies but it can be paid for with the money from the emergency fund if the home inspector has to make multiple trips to iron out problem areas within the house.
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
Although their mortgage rates are reasonable, other companies may have better rates available for specific customers. However, for customers with credit issues, Primerica's policies are right in line for these clients as well as clients looking to invest in and develop a portfolio the "middle market". For these customers, Primerica is a perfect place to begin. However, if you are a relatively well-off investor, Primerica would not be a good recommendation as again, this is not their target
Luckily under the new health care reform law, most people will receive help paying for their healthcare premiums and cost-sharing expenses that people with insurance have to pay out of pocket for doctor visits, and prescription medicine. Families and individuals will be able to receive this assistance with incomes between one hundred and four hundred percent of the federal poverty line. One hundred to four hundred percent makes up at about $23,000 to $94,000 a year assume this is for a family of four.
Taxes in relation to the new healthcare reform is a prominent topic when one examines the supporting and opposing sides of the law. New taxes on businesses producing medical equipment and new Medicare taxes on investments have been established. For individuals and businesses choosing not to participate in purchasing health insurance there will be a penalty called a "shared responsibility" tax. The accrued money from these taxes is being used, among other things, to provide low-cost insurance plans on the marketplace and to create subsidies for those purchasing the plans. Through these subsidies, "any individual making up to $45,960 or a family of four with household income up to $94,200 is eligible" ("Obamacare tax guide") to qualify and get assistance at the end of each year to off-set the cost of the insurance even more...
It generally does not protect the owner's equity in the property. To protect the equity in the home (i.e. down payment & property appreciation), you'll need an owner's title policy. In many areas of the country, home sellers pay for owner policies as part of their obligation to deliver good title (without liens or encumbrances) to the buyer. In other states tube home buyer purchases an owner's policy as an additional cost with the lenders policy. We believe purchasing an owner's title policy because the small added cost is definitely worth the additional
... forgiveness benefits will be taxable as income, as with the other income-driven repayment plans.” (Mayotte)
Paramount Residential Mortgage Group, Inc. originates residential mortgage loans secured by residential real estate throughout the United States. Generally, these loans
Buying a home is more complex then most think. A purchaser of a home doesn't pay in cash when buying a house. If that were so, then nobody would be able to afford one. A potential buyer must get a loan. The bank doesn't lend their money to just anybody, so there are prerequisites before a buyer should consider buying a home. The potential buyer must have enough money for a down payment which is 3% to 20% of purchase price, a steady job with for at least two years or more, must have a decent credit score with at least a 640 or better. That is standard for the market. (1) The credit score is based on the FICO score. FICO stands for, Fair Isaac Corporation, a company that has been in business since the early 1950's and monitors consumers' credit ratings and put a scoring system on it. (2) Conventional loans are usually financed up to eighty to ninety percent with a down payment required of ten to twenty percent. The potential buyer must also have a debt ratio not exceeding 28/39 of their income. The first number 28 refers to your new mortgage payment that cannot exceed 28% for your gross combined income and 39 refers to your mortgage payment plus revolving and installment debt as well as taxes and insurance cannot exceed 39% of you total combined gross income (3).
Finding a mortgage can be just as difficult as the home itself. There are more mortgages than there are possible homes. There are many factors that determine the amount of the mortgage and the interest on it. Credit bureaus such as Equifax, TransUnion, and Experian determine if the person has enough credit for a home loan. An acceptable credit score ranges from 620 and up for a mortgage. This is a very important facet because a person’s score can change the rate of interest. Other important factors that decide interest rate are the types of documents presented to the mortgage lenders.
You may be eligible for A Medicare Supplement Insurance (Medigap). A Medigap plan pays some of the medical expenses that Medicare doesn’t cover, such as copayments, deductibles, and certain hospital costs.
A house is the most important property a person can own, therefore a 100% replacement cost coverage is a must have. Insurers generally cover the home content between 50 to 75% of the home’s value. The most appropriate action is to make a list of home’s contents and estimate exactly the coverage needed.