Kathy O'Brien Realty - Lake Champlain & Vermont

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Money Down the Drain

tech <img alt="Money Down the Drain" src="https://s3.amazonaws.com/files.usmre.com/5042/blog/money_down_the_drain.png" style="float: right; height: 300px; width: 200px; margin: 5px;"><p>Imagine your money down the drain...private mortgage insurance is necessary for buyers who don't have, or choose not to put 20% or more down when they purchase a home. <strong>If this is you, take heed.</strong></p> <p>It is required for high loan-to-value mortgages. It also provides an opportunity for many people to get into a home who would otherwise not be able.</p> <div>But, avoid money down the drain!  Eliminate the expense as soon as possible - you'll lower your monthly payment!</div> <div> </div> <p>FHA loans made after 6/1/13 that have 90% or higher loan-to-value at time of purchase have a mortgage insurance premium (MIP) for the life of the loan. FHA loans made prior to 6/1/13, can have the MIP removed after five years, if the unpaid balance is 78% or less than the original loan-to-value.</p> <p>VA loans do not require mortgage insurance. Conventional loans, in most cases, with higher than 80% loan-to-value require mortgage insurance. </p> <h4>The cost of that insurance varies but with a $250,000 mortgage, it could easily be between $100 and $200 a month!</h4> <p>Your monthly mortgage statement should itemize what your monthly fee is for the mortgage insurance. Unlike interest that is deductible, most homeowners are not able to deduct mortgage insurance premiums.</p> <p>If you plan to remain in the home or to stay there for a considerable number of years, the solution may be to refinance the home. If the home has increased since it was purchased, the loan-to-value at its new appraised value may not require PMI. Who knows...you might even be fortunate enough to obtain a lower rate than you currently have.</p>

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