Question:

What mortgage insurance factors are important?

Answer:

There are some mortgage insurance factors that have to be considered in order to determine your mortgage insurance premiums and terms.

Mortgage Insurance Factors

Firstly, your mortgage insurance will depend on the down payment you provide to the lender. The bigger the down payment, the less the mortgage insurance premiums you will pay. Also, lenders are required to cancel your PMI if you are on track with payments as soon as you reach 22 or 23% equity; you could request mortgage insurance cancellation at 20% equity and if you are current with your payments, your lender has to honor your request.

Anther mortgage insurance factor is your loan type. If you are getting a conventional loan, it will be insured to up 20% of the house value. If you are getting a VA or FHA loan, they are 100% insured. However, partial FHA MIP refunds are available.

Your income is yet another of the important mortgage insurance factors. If your income is less than $110,000 annually, you enjoy full tax deductibility of the PMI. If your income exceeds this limit, you are entitled to partial mortgage insurance tax deductions until 2010 included.

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