What is Mortgage Loan Insurance?
Mortgage Loan Insurance is one of those controversial costs that many buyers incur when purchasing a home. On the one hand, this insurance allows people with smaller down payments to buy a home in Lethbridge when they otherwise would not qualify, but in so doing they incur the additional cost of purchasing the insurance. All this becomes even more annoying considering that the insurance does not protect you, the buyer; instead it protects your lender against mortgage default. But, having said all this, rules are rules, and mortgage loan insurance is a necessity that protects consumers and lenders and helps keep the economy of the country buoyant.
Do I Need Mortgage Loan Insurance?
Mortgage loan insurance is usually required by lenders when a buyer is purchasing a home with a down payment of less than 20% of the purchase price. Basically, anyone with less than 20% down payment is considered to be a higher risk for the lender and hence this insurance protects the lender against default. The cost of the insurance is calculated as a percentage of the purchase price and can be paid upfront or lumped in with your mortgage payments. The great thing about this insurance is that you could potentially buy a home in Lethbridge with as little as 5% down.