Mortgage Insurance
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From Wikipedia,
the free encyclopedia Mortgage
insurance (also known as mortgage guaranty) is an insurance
policy which compensates lenders or investors for losses due to the default
of a mortgage loan. Mortgage insurance can be either public or private
depending upon the insurer. The policy is also known as a mortgage indemnity
guarantee (MIG), particularly in the UK. |
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For example, Mr. Smith decides to purchase a
house which costs $150,000. He pays 10% in $15,000 downpayment and takes out
a $135,000 mortgage. Lenders will often require mortgage insurance for
mortgage loans which exceed 80% (the typical cut-off) of the property's sale
price. Because of his limited equity, the lender requires that Mr. Smith pay
for mortgage insurance that protects the lender against his default. The
lender then requires the mortgage insurer to provide insurance coverage at,
for example, 25% of the 135,000, or $33,750, leaving the lender with an
exposure of $101,250. The mortgage insurer will charge a premium for this
coverage, which may be paid by either the borrower or the lender. If the
borrower defaults and the property is sold at a loss, the insurer will cover
the first $33,750 of losses. Coverages offered by mortgage insurers can vary
from 20% to 50% and higher. To obtain
public mortgage insurance from the Federal Housing Administration, Mr. Smith
must pay a mortgage insurance premium (MIP) equal to 1.75 percent of
the loan amount at closing. This premium is normally financed by the lender
and paid to FHA on the borrower's behalf. Depending on the loan-to-value
ratio, there may be a monthly premium as well. The United States Veterans
Administration also offers insurance on mortgages
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More related links about
Mortgage Insurance
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An insurance policy that a home buyer must
buy if the down payment is less than 20 percent of the purchase price.
The mortgage insurance
is payable to the ...
www.yourdictionary.com/finance/private-mortgage-insurance
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All of us at RMIC strongly believe in
providing mortgage
insurance services supported by outstanding customer service with a
personal touch. ...
www.rmic.com/ -
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With
Mortgage Insurance,
if you are you're under age 50 you are eligible for two full years of
disability payments.
www.lycos.com › ... ›
Business ›
Financial Services ›
Insurance
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To find more information about
mortgage insurance
and to use a specific formula to estimate when PMI may be canceled,
visit the web site of the Mortgage ...
www.frbsf.org/publications/consumer/pmi.html
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Private
Mortgage Insurance
(PMI). Policy protecting the holder against loss resulting from default
on a mortgage loan. ...
financial-dictionary.thefreedictionary.com/private+mortgage+insurance
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Business, Information Technology, Finance
& Risk Management and Stock Market Financials Research on
Mortgage Insurance.
Mortgage Insurance
related research ...
portal.brint.com/cgi-bin/.../cgsearch.cgi?query=Mortgage+Insurance
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