Mortgage insurance (MI) is a policy mandated by mortgage companies to protect them from losses if a property owner defaults on their mortgage. When the mortgage company goes to relinquish a home, they are unlikely to recover the total amount owed on the mortgage. MI applies to first mortgages where the home buyers are borrowing higher than 80% of the sale price of the property. There is normally an up-front MI fee due at closing and recurring fees based on a percentage of the initial loan balance. Southern NH financing MI detail and recommendations on removing MI are detailed below.

Calculating MI

MI percentages differ based on the type of loan. Home owners should get a quote from a mortgage professional to obtain sample rates and evaluate the impact that it will have on anticipated mortgage payments. Rates can also change at certain times, so be sure to get current figures when you are assessing the affordability of a home purchase. Once you obtain a loan, the MI rate for that specific loan will remain the same for the life of that loan. With certain mortgages, such as FHA, you may be able to obtain a refund of a portion of the up-front MI charged at closing if you refinance within a certain period of time.

Recommendations on Removing MI

Recurring MI fees will normally disappear when the loan is paid down to 80% of the original purchase price. Most mortgage companies allow removal of MI a few percentages earlier if prompted by the homeowner when that percentage mark is attained. Refer to your closing paperwork for the percentages that apply to your loan. In an inclining real estate market, homeowners can also order a new appraisal (from a vendor approved by the mortgage company) to document that the value of the home has improved and that you may have therefore reached the 80% mark earlier than expected.

Southern NH Financing MI Detail and Help

Most home buyers are unable to afford a 20% down payment and therefore cannot avoid MI. By understanding how MI works and how to get rid of it, home buyers can save significant money. We hope that you found this Southern NH financing MI detail useful and will be able to use the recommendations on removing MI. For additional information on this and other related topics, contact Donna Dufour at Accurate Title by calling 800-639-4405 or emailing