Private mortgage protection insurance is typically required when down payments are below 20%. Rates can range from 0.5% to 6% if the principal of the loan per year based upon loan factors such as the percent of the loan insured, loan-to-value (LTV), fixed or variable, and credit score. The rates may be paid in a single lump sum, annually, monthly, or in some combination of the two (split premiums).
LS INSURANCE SERVICE Knows about Mortgage Protection Insurance. We can help you find the right Mortgage Protection insurance for you and your family. Need more details? Give us a call to discuss your insurance needs (856) 489-3444.
BPMI or "Traditional Mortgage Insurance" is a default insurance on mortgage loans provided by private insurance companies and paid for by borrowers. BPMI allows borrowers to obtain a mortgage without having to provide 20% down payment, by covering the lender for the added risk of a high loan-to-value (LTV) mortgage. The US Homeowners Protection Act of 1998 allows borrowers to request PMI cancellation when the amount owed is reduced to a certain level. The Act requires cancellation of borrower-paid mortgage protection insurance when a certain date is reached. This date is when the loan is schedules to reach 78% of the original appraised value or sales price is reached, whichever is less, based in the original amortization schedule for fixed-rate loans and the current amortization schedule for adjustable rate mortgages. BPMI can, under certain circumstances, be cancelled earlier by the service ordering a new appraisal showing that the loan balance is less than 80% of the home's value due to appreciation. This generally requires at least two years of on-time payments. Each investor's LTV requirements for PMI cancellation differ based on the age of the loan and current occupancy of the home. While the Act applies to only single family primary residences at closing, the investors Fannie Mae and Freddie Mac allow mortgage services to follow the same rules for secondary residences. Investment properties typically require lower LTVs.
There is a growing trend for BPMI to be used with the Fannie Mae 3% down payment program. In some cases, the Lender is giving the borrower a credit to cover the cost of BPMI
We can get you protection for your home at a lower rate than the commercial lenders. Give us a call for a quote (856) 489-3444.
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