{"id":355776,"date":"2018-03-09T09:00:22","date_gmt":"2018-03-09T16:00:22","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=355776"},"modified":"2022-03-30T21:07:24","modified_gmt":"2022-03-31T03:07:24","slug":"how-to-avoid-mortgage-insurance","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/","title":{"rendered":"How to Avoid Mortgage Insurance"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-355072\" src=\"https:\/\/www.creditrepair.com\/blog\/wp-content\/uploads\/2017\/02\/AdobeStock_66187241.jpeg\" alt=\"Avoiding Mortgage Insurance\" width=\"500\" height=\"332\"><\/p>\n<p>Home buying can be a stressful and expensive process, but with careful planning, it doesn\u2019t have to be. There are many factors to consider when calculating your possible mortgage payment: cost vs. down payment, interest, and possibly mortgage insurance.<\/p>\n<p><a href=\"https:\/\/www.quickenloans.com\/blog\/avoiding-pmi\">Mortgage insurance, also known as PMI<\/a>, is simply a means for lenders to lower their risk when granting mortgage loans to home buyers. It is not designed to protect you, the borrower, like many other types of insurance. It is designed only to protect your lender and will not help you in the event of payment default. While many first-time home buyers and those in the midst of <a href=\"http:\/\/www.lexingtonlaw.com\">credit repair<\/a> may get slapped with mortgage insurance, there are many ways to avoid it. However, they all require a lot of foresight.<\/p>\n<ul>\n<li>\n<h2><strong>Put at least 20 percent down<\/strong><\/h2>\n<p>This is perhaps the most obvious solution to <a href=\"https:\/\/www.investopedia.com\/articles\/pf\/07\/avoid_pmi.asp\">avoid paying PMI<\/a> since lenders require a borrower with less that 20 percent equity to carry the insurance. With a higher down payment comes a lower loan-to-value ratio and, therefore, a less risky investment to your lender. Not only will putting 20 percent down on your loan help eliminate the possibility of having to pay mortgage insurance, but it will lower your overall mortgage payment and help you get a better interest rate.<\/li>\n<li>\n<h2><strong>Don\u2019t get a FHA loan<\/strong><\/h2>\n<p>FHA (Federal Housing Administration) insured loans were designed to help those buying their first home by allowing them to borrow up to 97 percent of the purchase price of the property. While FHA loans require a smaller down payment than a conventional loan, they almost always come with mortgage insurance. However, unlike a conventional loan, the mortgage insurance premiums are paid directly to the federal government (the Federal Housing Administration, to be exact). With a conventional loan, mortgage insurance premiums are usually paid to a private mortgage insurance company.<\/p>\n<p>However, if you\u2019re in the midst of <a href=\"https:\/\/www.lexingtonlaw.com\/credit-education\/credit-repair-company\">credit restoration<\/a>, you may benefit from an FHA loan in the long run. It may ultimately save you money, or it may cost you money. A mortgage broker can help you weigh the pros and cons.<\/li>\n<li>\n<h2><strong>Join the military<\/strong><\/h2>\n<p>There are many benefits to joining the military. Not only do you have the honor of protecting and defending your country, but you may also be able to qualify for financial benefits down the road. A VA-insured loan will not carry mortgage insurance with it, even if your down payment is less than 20 percent. That\u2019s because a VA-backed loan carries with it the \u201cVA guarantee,\u201d which replaces the need for mortgage insurance.<\/p>\n<p>A <a href=\"https:\/\/www.lexingtonlaw.com\/blog\/mortgage\/how-to-pick-the-best-type-of-mortgage.html\">VA loan<\/a> usually requires an upfront \u201cfunding fee.\u201d The cost of the fee is determined by your type of military service, the amount of your down payment, any disability status, and whether or not you\u2019ve held a VA loan before.<\/li>\n<li>\n<h2><strong>Find a lender who will foot the bill<\/strong><\/h2>\n<p>Very occasionally, lenders will <a href=\"https:\/\/themortgagereports.com\/17861\/private-mortgage-insurance-avoid-pmi-mortgage-rates\">pay the mortgage insurance premium<\/a> out of their own pockets. This is dependent on many factors though, so make sure to do your research in considering this option and whether or not you qualify.<\/li>\n<\/ul>\n<p>Even if you are unable to avoid paying for mortgage insurance, don\u2019t despair. You won\u2019t be beholden to it forever. Once you have built 20 percent equity in your home, you can opt out of it, which can potentially save you hundreds of dollars per month. To learn more about selecting the best type of mortgage for your financial situation, <a href=\"https:\/\/www.lexingtonlaw.com\/blog\/mortgage\/how-to-pick-the-best-type-of-mortgage.html\">click here<\/a>.<\/p>\n<p>You can also carry on the conversation on our social media platforms. Like and follow us on <a href=\"https:\/\/www.facebook.com\/creditrepaircom\/\">Facebook<\/a> and leave us a tweet on <a href=\"https:\/\/twitter.com\/creditrepair\">Twitter<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Home buying can be a stressful and expensive process, but with careful planning, it doesn\u2019t have to be. There are many factors to consider when calculating your possible mortgage payment: cost vs. down payment, interest, and possibly mortgage insurance. Mortgage insurance, also known as PMI, is simply a means for lenders to lower their risk [&hellip;]<\/p>\n","protected":false},"author":34,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[91,78],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v17.5 (Yoast SEO v18.5.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Avoid Mortgage Insurance - CreditRepair.com<\/title>\n<meta name=\"description\" content=\"Home buying can be a stressful and expensive process, but with careful planning, it doesn\u2019t have to be.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Avoid Mortgage Insurance\" \/>\n<meta property=\"og:description\" content=\"Home buying can be a stressful and expensive process, but with careful planning, it doesn\u2019t have to be.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/\" \/>\n<meta property=\"og:site_name\" content=\"CreditRepair.com\" \/>\n<meta property=\"article:published_time\" content=\"2018-03-09T16:00:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-31T03:07:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.creditrepair.com\/blog\/wp-content\/uploads\/2017\/02\/AdobeStock_66187241.jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Taylor White\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.creditrepair.com\/blog\/#website\",\"url\":\"https:\/\/www.creditrepair.com\/blog\/\",\"name\":\"CreditRepair.com\",\"description\":\"We are the credit repair experts\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.creditrepair.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/www.creditrepair.com\/blog\/wp-content\/uploads\/2017\/02\/AdobeStock_66187241.jpeg\",\"contentUrl\":\"https:\/\/www.creditrepair.com\/blog\/wp-content\/uploads\/2017\/02\/AdobeStock_66187241.jpeg\",\"width\":6144,\"height\":4080},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/#webpage\",\"url\":\"https:\/\/www.creditrepair.com\/blog\/mortgage-and-housing-information\/how-to-avoid-mortgage-insurance\/\",\"name\":\"How to Avoid Mortgage Insurance - 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