Mortgage Insurance

Mortgage insurance is an insurance policy which compensates lender/investor for losses due to buyer default of a mortgage loan.

Conventional Financing

  • Required if less than 20% down payment is made.

  • We shop with the six largest providers to provide the best pricing possible.

  • How does it work?

    • Suppose you put down 10% and get a loan for the remaining 90% of the property’s value—$20,000 down and a $180,000 loan. With mortgage insurance, we our losses are limited if the home is foreclosed. That could happen if you lose your job and can't make your payments for several months.

      The mortgage insurance company covers a certain percentage of our loss. For our example, let’s say that percentage is 25%. So if you still owed 85% ($170,000) of your home’s $200,000 purchase price at the time you were foreclosed on, instead of losing the full $170,000, the lender would only lose 75% of $170,000, or $127,500 on the home’s principal. PMI would cover the other 25%, or $42,500. It would also cover 25% of the delinquent interest you had accrued and 25% of the lender’s foreclosure costs.

      If PMI protects the lender, you may be wondering why the borrower has to pay for it. Essentially, the borrower is compensating the lender for taking on the higher risk of lending to you—versus lending to someone willing to put down a larger down payment.

  • How to have MI Removed?

    • You can request the monthly mortgage insurance payments be eliminated once the loan-to-value ratio drops below 80%.

    • Once the mortgage's LTV ratio falls to 78%, MI is automatically cancelled. That happens when your down payment, plus the loan principal you've paid off, equals 22% of the home's purchase price. This cancellation is a requirement of the federal Homeowners Protection Act, even if your home’s market value has gone down.

    • Another option if you feel the homes value has increased, is to contact your service provider for an appraiser to verify your current equity. You will have to pay for the appraisal, if the value is there, MI is cancelled.

Why mortgage insurance is safer and smarter

There are additional benefits to having mortgage insurance, aside from needing less than a 20% cash down payment. Here are just a few reasons why Genworth Mortgage Insurance is the smarter, safer choice for you and your family:

Competitive

It’s affordable! With MI, you can take advantage of low interest rates and home prices and get into a home without having to come up with a 20% down payment. Ask your loan officer to compare a conventional loan with Genworth MI to a government-backed (FHA) loan.

Convenient

It’s faster to close! Often, conventional loans with mortgage insurance require less paperwork. So it’s much easier to complete – and quicker to close -- than an FHA loan.

Cancellable*

MI ends! Mortgage insurance may be cancelled when you’ve built 20% equity in your home and maintained a good payment record.

Peace of Mind

If your ability to make your mortgage payment is threatened by financial difficulty, Genworth’s Homeowner Assistance Program may be able to help.

Tax Deductible**

Homeowners who qualify can claim a tax deduction on their MI premiums on their federal income tax returns, reducing the cost of homeownership.

Genworth is my preferred carrier who provides value-adds for clients.