Have you recently purchased a home or are looking to purchase a home, and you’ve noticed a mortgage insurance fee? If you’re not quite sure what that is, you aren’t the only one. Many homeowners and homebuyers are confused or unaware of mortgage insurance, but it’s not something that should be ignored.
Mortgage insurance was created in order to protect the lender in the event that a homeowner doesn’t make their payments. All buyers who put less than 20 percent down on their Atlanta real estate purchase are required to pay this fee monthly until the point that they reach 20 percent equity.
The monthly mortgage insurance payment varies depending on the type of loan you are securing, the amount of your loan as well as the down payment amount. For example, if you take out a loan and put 15 percent down, you will be paying less mortgage insurance monthly and will be able to stop paying it faster than if you only put down 10 percent.
As of today (April 1, 2013), those seeking FHA loans also saw an important change as it relates to their monthly costs, as the monthly mortgage insurance increased by .1 percent. Those purchasing a home with an FHA loan after this date can expect their monthly payment to increase by $20 for a $200,000 loan.