Question:

Are there alternative mortgage insurance premium plans?

Answer:

Yes, there are alternative mortgage insurance premium plans, but no lender is obligated to disclose those to you. However, you are able to research the topic and ask the lender when you already know about an alternative mortgage insurance plan.

Paying Mortgage Insurance Upfront

As an alternative of making monthly mortgage insurance payments, one could ask to roll an upfront mortgage insurance premium into the loan. In this case, you will owe more than you borrowed but part of this upfront payment will be considered interest and will be tax-deductible.

Also, early payment of the loan results in a refund of the mortgage insurance premium - if the loan is repaid in a year, the alternative mortgage insurance premium is repaid almost 100%; in 5 years the mortgage insurance refund drops to 50%, and repaying the loan in more than 10 years will probably not allow for any refund. However, few people are aware of that option.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: