What is Mortgage Insurance?

If you’re in the market for a house, you may have heard the term mortgage insurance. Wondering what that means? Let Cesar Silva fill you in!

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If you don’t know what mortgage insurance is, it’s probably not what you’re imagining. It doesn’t protect you or your mortgage. It actually protects the investment the bank makes when they lend to you. That’s right, you’re paying for the bank to take out an insurance policy on your mortgage. So why would anybody do that? Well it’s generally a requirement on FHA loans or loans with a down payment of less than 20%. So what can you do? There are options. By working with a broker like Amerifund, you have access to lower mortgage insurances rates with as little as 10% down.  There are even options to avoid mortgage insurance by using a self-insured loan. These have higher rates, but may be worth it depending on your credit score and how long you plan on being in the home. Also note that mortgage insurance is typically not tax deductible on a primary residence like interest is. When you have a good loan officer in your corner, you will learn about all your options and they will guide you to the best decision for your own personal circumstances. If this confused you and you have more questions, just reach out, we are happy to take the time to help you feel comfortable when you make the decision.