The losses faced by the investors and the money lenders due to any default caused in mortgage loan are given relaxation by the insurance companies by taking mortgage insurance. The insurer can opt private or public type of mortgage insurance as per need. We all know that buying a home is the most tedious job, so who does not like to get a home on less than down payment price charged by the bankers?
Yes, you are thinking right, MI (mortgage insurance) offers you the privilege of owning a house on 20% less than down payment. The investors provide this facility to those borrowers who produce MI to the lenders because MI takes the financial guarantee of the individual so the advantage is provided. MI helps in buying a house faster because of lesser down payment. The loans having MI are approved sooner as compare to non-mortgage insurance loans.
The price range of private mortgage insurance falls in between 0.5% to 1% of the full loan amount which is charged annually. For example, if an owner has sanctioned $200,000 loan amount then he will be paying $2000 in a year. This amount is calculated on the loan taken and the capacity of the loan applier.
