Mortgage insurance

Look! I could never imagine that such a feature can really exist! Fizber.com, a fsbo website, has recently launched a new feature showing whether or not celebrity homes: http://www.fizber.com/ca/beverly-hills/ are located near a property for sale.

It’s a constant holiday living near a celebrity!

A unique service is also Fizber’s School info: http://schools.fizber.com/ This feature can help you to make an informed school choice decision when you decide to buy a new house in a different location and if you have kids. I was impressed by the simplicity of this feature: you just need to enter your address and press a button!

Notice:
+ PMI - Private Mortgage Insurance
+ MI - Mortgage Insurance

Private mortgage insurance companies try to help you hold onto your home if you get into trouble and run into some financial difficulty. PMI companies realize that their success depends on your success, and that is why they work with lenders to help you minimize the risk of losing your home if you meet with difficulties making mortgage payments.

You can get divorced, lose your job, or encounter other problems, but private mortgage insurance companies will make an effort to help you find ways to make your mortgage payment, protect your investment in your home and your credit. They also will work with lenders to optimize and restructure terms and payments, refrain from collecting the loan for a period of time.

Some interesting statistics…
Private mortgage insurance helped millions of Americans become homeowners sooner then they could imagine, with less money down. They all enjoy a home of their own! I think that PMI is your great opportunity, your key that unlocks the door to homeownership. All categories of population in the USA and other countries (first-time buyers, low-income buyers, new Americans and rural and inner-city buyers) can use this type of insurance.

Two out of five home buyers use PMI to enjoy benefits of homeowners. Now they have personal satisfaction, a sense of community, stability, an investment in the future and privacy.
For more information you can contact your lender or mortgage servicing firm, also I would like to recommend you visit the following sites and organizations:

— The mortgage insurance industry’s Web site (the web site of the Mortgage Insurance Companies of America)-http://www.privatemi.com

Mortgage Insurance Companies of America
727 15th St, NW, FL 12
Washington, DC 20005-2168
202-393-5566

— The site of the Federal Reserve Bank of San Francisco -http://www.frbsf.org/publications/consumerhas (here you will find several other consumer brochures). By the way, you can send your questions or comments about these brochures. Here is the address:

Federal Reserve Bank of San Francisco
Public Information/Publications
P.O. Box 7702, MS 1110
San Francisco, CA 94120-7702
(415) 974-2163

— The U.S. Department of Housing and Urban Development Customer Service Department (here you can ask your questions about PMI and low down-payment loans):

U.S. Dept. of Housing & Urban Development
Attn: Customer Service
451 7th Street, SW
Washington, DC 20410
http://www.hud.gov
(800) 767-7468

— And at last I would recommend you to find some information in the Global Network using such search engines as, for example, Google (http://google.com) and Yahoo (http://yahoo.com).

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Notice:
+ PMI - Private Mortgage Insurance
+ MI - Mortgage Insurance

You can use your Private Mortgage Insurance plan as long as you need, because it can be canceled. A federal law covering loans includes two basic consumer protections:

1) A lender must inform a borrower — both at closing and annually — about his/her right to request PMI cancellation when his mortgage balance is 80 percent of the original value of the house and he/she must explain how to do it.
So, as you see from the first point according to the federal law you have the right to request cancellation of Private Mortgage Insurance when you pay down your mortgage to 80 percent of the original price.
But you also need a good payment history. It means that you have to provide your lender with the following information:
— You have not been 30 days late with your mortgage payment within a year of your request (you can also present documents that you have not been 60 days late within two years).
2) A lender will automatically cancel PMI when the mortgage balance reaches 78 percent of the home’s original value. PMI generally is cancelable once a borrower has built up enough equity and is up to date on his/her mortgage payments.

Some companies do not make the decision to cancel insurance, and you should contact the company you send your mortgage payment to for details on your loan.

<:3  )~~~~~~
Yours sincerely,
AlexSandra

Notice:
+ PMI - Private Mortgage Insurance
+ MI - Mortgage Insurance
Today I will speak about different mortgage insurance plans with flexible premium. Of course, you know that generally borrowers pay for mortgage insurance. An initial premium will be collected at closing and will depend on your premium plan.
So, there are a lot of mortgage insurance plans, but I will describe the main of them:
The first plan is called “singles” or “single premium”: the borrower pays a one-time single premium, he finance a one-time premium as part of his loan. No out-of-pocket cash is used for MI at closing, because single premiums are typically financed as part of the mortgage loan amount. To my mind this plan will be ideal if you want to keep both your closing costs and your monthly mortgage payments at a minimum.
The second plan is called “monthly premium” or “pay-as-you-go insurance”: the cost is slightly more than traditional MI plans but monthly premiums greatly reduce mortgage insurance closing costs. Borrowers pay for MI monthly as part of their total monthly house payment. In other words your Private Mortgage Insurance payment is folded into your monthly mortgage payment. I think that it is a wonderful choice if you want to minimize your closing costs.
The third plan is called “annuals”: the borrower pays the first-year premium at closing; an annual renewal premium is collected monthly as part of the total monthly house payment. This plan gives you an opportunity to pay an up-front premium that can be financed with an annual renewal.
And the last plan is called “lender-paid mortgage insurance”: the lender pays the PMI premium. You pay a higher interest rate for the life for the loan to refund the lender’s higher cost of loaning you money. This plan reduces closing costs and monthly payments for many borrowers. But I would like to mention one important thing - it cannot be canceled.

Using one of these plans you will face with such terms as “refundable premiums” and “nonrefundable premiums”.

A refundable premium gives you the opportunity to receive money back on any unused portion, in the event that mortgage insurance coverage is discontinued before the loan is paid in full.
The cost for a nonrefundable premium is less than that of a refundable premium, so giving you a small savings. If coverage is discontinued on a loan with a nonrefundable premium, you have no opportunity for a refund.

<:3  )~~~~~~
Yours sincerely,
AlexSandra

Notice:
+ PMI - Private Mortgage Insurance
+ MI - Mortgage Insurance

Of course, PMI plays an important role in the mortgage industry because it protects a lender against loss in the event that a borrower defaults on a loan and enables borrowers with less cash to have opportunity to become homeowners. Using MI, you can buy a home if you have from 3 to 5 percent down payment. In that way it is possible for you to buy a home sooner without waiting years and years to accumulate a large down payment.
And now I would like to speak about advantages of mortgage insurance in more detail:
Firstly, it’s important to mention that first-time and move-up buyers can profit from keeping cash for additional expenditures and putting less money down, making home improvements, eliminating debts or paying for a college education.

Secondly, if you make up a list of your taxes, you will see that mortgage insurance can save you money! The larger loan amount that results from a low down payment increases your tax deductions for mortgage interest. Purchase a home with MI, and enjoy the tax benefits of homeownership!

Thirdly, MI helps get over the biggest barrier to homeownership for a first-time buyers, – coming up with the traditional 20 percent down payment. As I have told you can buy your house, and start building home equity, years and years sooner!

Fourthly, mortgage insurance can be canceled; it means that you stop paying for it once you have a track record of on-time mortgage payments and achieve sufficient equity.

And at last I would like to provide you with one more advantage
Imagine that you are a move-up buyer and have enough income; mortgage insurance allows you to consider a wider range of homes. You may ask me: “In what way I can do it?” And I will give you a good example:

“If you have $20,000 in savings and make a 20 percent down payment, you can buy a $100,000 (!!!) home. With 10 percent down and an insured loan, you can buy a $200,000 home. With 5 percent down and an insured loan, you can buy a $400,000 home. Just imagine it! ”

Your calculations:
X – your savings.

- 20 % down payment: you buy a home at the price of $(X*5)
- 10 % down payment: you buy a home at the price of $(X*10)
- 5 % down payment: you buy a home at the price of $(X*20)

<:3  )~~~~~~
Yours sincerely,
AlexSandra

Mortgage insurance (MI) is the most flexible, convenient, simplest and least expensive way for you to buy a home with a low down payment. It gives you a wonderful opportunity to buy a home with a down payment of as little as 3 to 5 percent. Moreover I would like to mention qualified borrowers — instead of the 20 percent down payment lenders have required for loans without insurance.  Just imagine – you, as the average home purchaser, can buy a house 10-15 years sooner by using mortgage insurance. I mean that you can buy a home years and years sooner than you could otherwise, instead of waiting to save enough for a 20 percent down payment.

Passing remark #1
By the way mortgage insurance is also called Private Mortgage Insurance (Private MI or PMI)

Mortgage insurance is a special instrument that protects investors and lenders against loss if a borrower stops making mortgage payments. In other words it protects the lender against loss in the event that the borrower defaults. The borrower pays the premium, but the lender at the same time receives the protection. If the borrower defaults and the lender takes title to the property, the mortgage insurer reduces the loss to the lender and shares the risk of lending the money to the borrower.

Passing remark #2
Private MI protects the investor and lender (but not the borrower!), from loss. MI and the government mortgage insurance program (that is run by the Federal Housing Administration or FHA) are not the same things.

Your insurance can be canceled once you build up enough equity in the property. Indeed, on most loans, MI is canceled when the mortgage balance reaches 78 percent of the house’s original value, it will be done automatically.

Passing remark #3
Speaking about this kind of insurance you shouldn’t confuse mortgage insurance with mortgage life insurance, which provides coverage in the event of a borrower’s death (or pays off a mortgage if you become disabled), or homeowner’s insurance, which protects the homeowner from loss due to damage from fire, flood or other disaster.

Using MI it’s possible for you to extend the loan. Mortgage insurance creates homeownership opportunities for you and other many low to moderate income families. You can benefit. MI allows you to become homeowner sooner, and it dramatically increases your buying power.
First-time buyers can use a low down payment to afford the first home, or to purchase a more expensive home sooner. Repeat home buyers have an opportunity to put less money down and gain significant tax advantages.

So, as you see mortgage insurance is a favorable instrument and you should make note of it! And I will prove my case in the next post again, speaking about advantages of MI.

<:3  )~~~~~~
Yours sincerely,
AlexSandra