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Todd Talbot
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Mortgage Insurance - PMI and MIP

When you begin your search for a home a lot of new terms and acronyms you may never have heard before will suddendly will begin to appear.  Escrow, arrears, DOM and LTV are among the many words you will use in your new found langauge.  For now, I want to take a closer look at PMI (Premium Mortgage Insurance) and MIP (Mortgage Insurance Premium).  Mortgage Insurance... It sounds like a premium I pay in the event I don't make my monthly mortgage payment my mortgage insurance company will make it for me, doesn't it?  This couldn't be any further from the truth.  It is true that you will make a monthly mortgage insurance premium payment; however, that payment will benefit the mortgage servicer collecting your monthly payments, not you.  Mortgage lenders charge this insurance premium fee to borrowers in the event of borrower defaut.  This insurnace is used to recover the lender's costs associated with borrowers who don't make there payments.  If this doesn't sound right to you, we think a like; yet, as a mortgage finance borrower you will be charged this monthly premium unless you are able to pay 20% of your purchase price as down payment.

Any insurance is bad enough, this is insurance that you pay for and will not benefit you. 

Just as an example this can amount to as much as $150+ per month for a $200,000 home purchase.

There are other ways to avoid mortgage insurance.  Talbot Team is affiliated with several different mortgage lenders each providing unique solutions to decrease or eliminate mortgage insurance for market segments ranging from doctors to lower income hourly wage earners.

Contact the Talbot Real Estate Team to find out what solution may work for you. 






Location: Blog >> Mortgage Insurance - PMI and MIP

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