The combination of rising home prices, increasing taxes and unforeseen expenses related to homeownership can make saving for a 20 percent down payment very difficult. However, with a little help from Wyndham Capital, your dreams of homeownership are well within reach.
Mortgage insurance helps consumers buy a home sooner and with a lower down payment. In fact, for qualified borrowers a home can be purchased with as little as five percent down. It’s important to remember that mortgage insurance protects the lender and investor – not the homeowner – from losses related to borrower default and foreclosure.
The cost of mortgage insurance depends on two factors:
Your Wyndham Capital mortgage professional can tell you more about the specific premium costs and benefits of buying mortgage insurance.
The cost of mortgage insurance is divided into two parts. The first part is a payment made at the time of closing. The second is an ongoing payment made each month with your principal and interest payment. The average costs of mortgage insurance premiums vary, but typically they fall between one-half and one percent of the loan amount, depending on the size of the down payment and loan specifics.
Unlike your mortgage interest, these premiums are not always tax deductible. Mortgage insurance is one of the few types of insurance products that doesn't underwrite its premiums based on your individual default risk. Rather, mortgage insurance is based on the size of the borrower's mortgage and the amount of money put down. So, two individuals with different credit scores but with the same mortgage amount and down payment can expect to pay about the same mortgage insurance premium.
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