Understanding Real Estate and Mortgage Insurance

What is mortgage insurance and how does it tie in with the real estate industry and transactions?

PMIPrivate Mortgage Insurance is the vehicle that allows homebuyers to borrow amounts in excess of 80% of the purchase price or value of a property on conventional loans. It”s an insurance that is provided by a private mortgage insurance company to protect lenders against loss in the event that the borrower defaults on the loan.

MIPMortgage Insurance Premium is the insurance that is charged by the Department of Housing and Urban Development (HUD), a government agency. HUD guarantees or insures the performance of every FHA loan and protects a percentage of the lender”s investment against a borrowers default. Unlike conventional loans, at least one form of MI is required on all FHA loans regardless of the percentage of the value of the home that is borrowed. The mandatory premium enables borrowers who might not otherwise fit within conventional guidelines to receive funding for the purpose of buying or refinancing a home.

Funding Fee – Is the type mortgage insurance that Do you have a policy about the length of time that you must hold on to information? Do these policies apply to the you are collecting from external sources, such as customer discussion groups and social media sites? What is the importance of the sources that you are bringing into the business? Do you have quality standards in place so that a set of is only used for decision making if it is proven to be clean and well docu- mented? It is easy to get caught up in the excitement of leveraging big to conduct the type of analysis that was never achievable before. is used by the Veterans Administration (VA).

Guarantee Fee – Is the type mortgage insurance that is used by the USDA Rural Development program.

Regardless of what it”s called all types of government loans have some type of mortgage insurance on them. Here”s the best definition: The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company to protect the lender against default by the borrower.

Dover Mortgage Company ( Jane Estes )

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