If you're buying a home and are borrowing more than 80% of the home's value,the mortgage must be insured. This insurance protects the lender against borrower default, and enables them to give you mortgage financing for the purchase of a home with a small down payment. Mortgage default insurance can make a big difference in how quickly your mortgage loan is approved.

Mortgage default insurance is not the same as life or disability insurance, which pays off your mortgage in full if you or your spouse dies.

Lower down payment funding available

Mortgage default insurance is a win-win solution for both home buyers and lenders. Lenders rely on mortgage default insurance to protect themselves from financial losses in case a loan is not repaid. Because lenders have this protection, they are willing to offer loans with very low down payments - as little as 5% of the loan amount.

Buy your dream home

For loans without mortgage default insurance, most lenders require a down payment of 20% of the purchase price. That's a lot of money, especially in today's housing market of fast-rising prices. Mortgage default insurance allows you to start enjoying the benefits of home ownership when it is financially right for you.

How it works

If you have less than a 20% down payment, you'll pay a mortgage default insurance"premium" which can be capitalized into your mortgage. This premium will be based on the percentage you borrowed of your home's total value.

For example:  For a $200,000 house with 5% down payment, 25 years amortization

Purchase Value=      $200,000 

Down payment=         $10,000 ($200,000 x 5%)

Amount=                  $190,000 ($200,000 - $10,000)

Insurance premium=     $5,985 ($190,000 x 3.15%)

Total Loan amount=  $195,985 ($190,000 +$5,985)

There are many types of mortgage default insurance products, allowing you to buy a home with a very low down payment. Please call me to see if mortgage default insurance can help you achieve your home ownership dreams.