Home Mortgage Insurance

Exclusive summary about home mortgage insurance by G. Mundy and Simon Lance Burgess

Because home prices have made twenty percent down payments impossible for legions of first time home buyers, a dual-loan concept has evolved for home financing that has made home mortgage insurance companies very unhappy. The policy protects the lender against default, while the borrower pays the mortgage insurance premium.

Home mortgage insurance can be expensive: as high as $1,500 per year on a $200,000 home. While the additional loan will be at a higher rate than the mortgage, the interest on that loan is deductible whereas the premium on mortgage insurance is not. According to one estimate, forty percent of all home purchases with down payments of less than twenty percent now opt to avoid home mortgage insurance.

Because it’s folded into the mortgage premium, the policy premium may be deductible as interest. Home mortgage insurance companies have been lobbying Congress aggressively to provide deductible status for their product.

Mortgage Insurance Could Give You The Income You Need To Keep Your Home

Mortgage insurance would payout a tax free income each month you were out of work for up to 12 months and though some providers offer cover for up to 24 months.

Although mortgage cover - or ASU insurance as it is sometimes called - can be purchased when you take out your mortgage with the high street lender, this is often the dearest way of buying the cover and it can add literally thousands of pounds more onto the mortgage than it needs to.

The cheapest premiums can be found with a standalone specialist provider of mortgage insurance and along with securing the cheapest possible policy you can also benefit from the advice a specialist will give.