Be an Informed Borrower
Although mortgage insurance is only a small part of your overall home-buying process, making the right decision could save you thousands of dollars over the life of your loan.
To make sure you get the right type of mortgage insurance for your needs, here are some things to consider when talking to your loan officer:
- Get a clear understanding of whether you want to use a single premium or monthly premium. Make sure you consider the funds you'd need at closing and the lifetime cost of the loan.
- Make sure you're comfortable with what your loan officer is recommending. Remember, you are the customer! In some instances, lender-paid mortgage insurance may get you the lowest monthly payment, but not the lowest interest rate on your loan. Do what makes sense for your financial situation.
- If your loan officer suggests an FHA loan, ask to see a conventional option with MI. Don't forget that FHA insurance generally cannot be cancelled, which adds significantly to the cost over the life of the loan.
- Not all MI companies are the same. If your lender is a partner with United Guaranty, make sure you ask to receive a MI rate quote using Performance Premium®. This step could save you some money over other MI companies' traditional methods of "one-size-fits-all" pricing.