Many home buyers who purchase a home also buy some form of mortgage insurance. There is private mortgage insurance and general mortgage insurance. Private mortgage insurance is an extra insurance that offers protection for a lender and for a buyer too. Private mortgage insurance helps to protect in the event of a default of payments. It is used in most home purchases. General mortgage insurance can help you in dealing with the loss of a job or a change in your financial situation. Let’s take a look at a few of the benefits that come with purchasing mortgage insurance.
Lower Down Payments Requirements For Homebuyers
A 20 percent down payment was the industry standard for most homebuyers for a number of years. Saving this much money can take a really long amount of time. For example, you would have to save $50,000 to purchase a home worth $250,000. This would make it almost impossible for many individuals to buy a house. Private mortgage insurance reduces the amount of time that it takes for a borrower to get a mortgage. Borrowers may only have to come up with 5 to 10 percent of the purchase price in order to get in a home. This makes the dream of home ownership a reality for a larger number of people.