Homeowners insurance provides financial protection if your home is destroyed or severely damaged. In contrast, mortgage insurance protects your lender if you cannot make your mortgage payments. As a matter of fact, this is why you should understand that mortgage insurance is typically required for those who do not put down 20 percent at the closing.
Here’s a quick breakdown:

• Conventional Loans: Private Mortgage Insurance (PMI) is required if your down payment is less than 20% (or you borrow more than 80%). It increases the cost of your monthly mortgage payment; however, you can request to remove PMI after you’ve paid off enough of your loan to have 20% equity in your home.
• FHA Loans: Compared to traditional mortgage loans, these loans, which are guaranteed by the Federal Housing Administration (FHA), have far more accommodating lending conditions. While PMI with conventional loans goes away over time, MIP (mortgage insurance premium) is typically for the life of the loan.

Owning a home involves mortgage insurance, and you must be thinking about how much mortgage insurance costs might be.

For a specific mortgage insurance estimate, we recommend speaking with our experts at Homestead Mortgage – one of the most trusted Mortgage companies in the business.

How much does mortgage insurance cost for conventional loans?

A typical loan with private mortgage insurance is a little different. This is often a monthly fee that is added to your mortgage and accumulates to several thousand dollars annually. Your loan size, down payment, and credit score all have an impact on how much you owe.

Will Your Premium Increase?

Nope! Once you have locked in your original mortgage, your PMI and MIP payments will also remain the same for the life of the loan.

What if I want to pay for the mortgage insurance upfront with my FHA loan?

Yes, a percentage payment is required for some conventional loans, but you must meet the requirement that you use a lender that offers “lender-paid” private mortgage insurance. You pay a little more interest rate with lender-paid PMI, but you have zero monthly PMI costs.

Why Choose Homestead Mortgage?

Providing home loans to clients with competitive interest rates and superior service, Homestead pledges to help borrowers overcome roadblocks that can arise while securing a loan.