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Private Mortgage InsurancePrivate Mortgage Insurance is a safety net for lenders and payment of these insurance premiums can actually increase the ease of obtaining a loan. Mortgage insurance is paid by the borrower, but the lender is the beneficiary if the borrower defaults on the loan. Since the risk of insured loans is transferred to an insurance company, the lending institution is freed up to loan more money to other borrowers. Traditionally, mortgage insurance has been required for loans in which less than a 20% down payment is paid. Without a mortgage insurance option there would be far fewer people who would have the opportunity to own homes because very few people (in today's market) can generate a 20% down payment. Since 2000, the percentage of insured loans has dramatically dropped from 60% to 30%, yet mortgage insurance is probably our single best hope for the future in assuring a larger number of homeowners in the market. Mortgage insurance does add to the monthly cost of a mortgage, but a greater number of lenders are requiring mortgage insurance for more loans. No longer can a lender or borrower be assured that a property will increase in market value as the loan matures. |
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Helton Genealogical DNA Project - Hilton Family Tree - http://hiltonfamilytree.com
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