Tag Archives: mortgage insurance

Down payment insurance coming soon

The basic idea is straightforward. For an upfront premium that under some circumstances could be part of the interest rate you pay on your mortgage, your down payment — all the way up to $200,000 — would be insured, with you as the beneficiary. If the value of your house declines and you sell at a loss, you’d be eligible to make a claim for up to the full amount of your original down payment.

The premiums are expected to average around $1,200 on a $20,000, 10 percent down payment on a $200,000 house. If you purchase the coverage as part of a lender credit toward closing expenses, rather than paying cash for the coverage at closing, the +Plus premium could be rolled into the interest rate on the entire loan, raising the rate slightly. It could also be a supplement to lender-paid mortgage insurance, with a higher rate on your mortgage.

Sounds intriguing, right? But as with all insurance products, you’ve got to look hard at the details, especially the terms governing when and how much you’ll receive if you make a claim for a loss. The sponsor of the plan is a company in Dallas, ValueInsured.  For the +Plus program, ValueInsured is partnering with Texas-based specialty insurer Houston International Insurance Group, and Everest Re Group Ltd., a reinsurance company headquartered in Bermuda.

read more at: http://www.telegram.com/article/20151008/NEWS/151009437

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NEW FHA Program reduces Mortgage Insurance Premium

The Federal Housing Agency recently announced it is expanding access to mortgage credit for underserved borrowers. In its BluePrint for Access, the FHA proposes that under its Homeowners Armed with Knowledge (HAWK) Program, homeowners who complete housing counseling both before and after closing will receive a “50 basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10 basis point reduction in the annual MIP.” FHA sees the HAWK program as a way to extend credit while also reducing defaults, as delinquencies are 29% lower among first-time homebuyers who receive housing counseling. On the average FHA loan balance of $180,000, the FHA estimates these savings to add up to nearly $9,800 in savings over the life of the loan. The FHA is set to implement Phase I of the HAWK Program this Fall 2014.

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Congress is Making Owning a Home More Expensive

Though its demise drew little attention because of the partisan year-end brawl over the payroll-tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction – plus mandatory new fees imposed by Congress on all new conventional and FHA loans – could effectively ratchet up the costs of homeownership this year.
The expiration of mortgage insurance deductibility will hit many low-down-payment conventional loans originated since 2007, plus virtually all new mortgages closed this year where the down payment is less than 20 percent. Though industry experts do not have precise numbers, their estimates range into the millions of existing owners and new purchasers potentially touched by the deductibility termination. Borrowers using guaranteed veterans (VA) and rural housing loans, where down payments can drop to zero, also are affected.

Read more here: http://www.charlotteobserver.com/2012/01/14/2921422/congress-cuts-mortgage-insurance.html#storylink=cpy

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