An 80-10-10 mortgage is a piggyback mortgage where the first mortgage covers 80% of the home's value, the second mortgage covers 10%, and the remaining 10% is a cash down payment. This structure helps homeowners avoid mortgage insurance.
Credit life insurance is a policy that pays off a borrower's debt if they die or sometimes if they become disabled. It contrasts with mortgage insurance, which is specifically designed to protect lenders from defaults.
An escrow account is a financial arrangement where a third party holds funds temporarily until they're needed for specific obligations, such as property taxes, homeowner's insurance, and mortgage insurance in real estate transactions.
The Federal Housing Administration (FHA) is a United States government agency that provides mortgage insurance on loans made by FHA-approved lenders. It aims to make homeownership more accessible, especially for first-time homebuyers, by reducing the risk for lenders and arranging easier borrowing terms for borrowers.
The FHA 203(b) program provides mortgage insurance to lenders to protect against borrower default and is commonly used to finance the purchase of new or existing one- to four-family housing.
An FHA Mortgage Loan is a mortgage loan insured by the Federal Housing Administration (FHA), designed to help lower and moderate-income individuals qualify for homeownership. This type of loan allows borrowers to make a lower down payment and can be more lenient on credit scores compared to conventional loans.
A Home Equity Conversion Mortgage (HECM) allows older homeowners to access some of the equity in their homes, either in the form of monthly payments for life or a fixed term, or as a lump sum or line of credit. This reverse mortgage product is insured by the Federal Housing Administration (FHA).
The Homeowners Protection Act of 1998 regulates private mortgage insurance requirements, aiming to protect homeowners from unnecessary continued insurance payments when their loan-to-value ratio reaches certain thresholds.
Insurance (Mortgage) is a service, generally purchased by a borrower, that indemnifies the lender in case of foreclosure of the loan. Indemnification is generally limited to losses suffered by the lender in the foreclosure process.
An insured mortgage is a type of home loan that is backed by either private mortgage insurance or government mortgage insurance programs to protect lenders against borrower default.
Loan processing encompasses the various steps taken by a lender to approve a loan, from the initial application to the closing of the loan. It involves verifying the borrower's information and fulfilling necessary requirements to ensure the legality and financial viability of the loan.
The Loan-To-Value (LTV) Ratio is a financial term and calculation that lenders use to express the ratio of a loan to the value of an asset purchased. It plays a crucial role in the assessment of risk associated with lending, especially in real estate.
MGIC is a provider of private mortgage insurance in the United States. Private mortgage insurance (PMI) protects lenders by covering mortgage payments in the event the borrower defaults, particularly when the borrower puts down less than 20% as a down payment.
The smallest cash contribution required to obtain a loan, usually expressed as a percentage of the loan amount.
Mortgage Guarantee Insurance Company (MGIC) is a private institution that provides insurance to lenders, ensuring loan repayment in case of default or foreclosure by the borrower.
Mortgage Guaranty Insurance Corporation (MGIC) is a company that provides mortgage insurance, which protects lenders from losses when a borrower defaults on a mortgage loan. MGIC ensures that lenders can recover the money if a borrower does not fulfill their loan obligation.
Mortgage insurance is a protection for the lender in the event of borrower default, covering a portion of the amount borrowed to mitigate risk.
Mortgage Insurance Premium (MIP) is a fee paid by a borrower to obtain mortgage insurance on a mortgage loan, which protects lenders against losses if the borrower defaults. This fee can be paid as a lump sum at the time of loan closing or as a periodic amount included in the monthly payments, or both.
Private Mortgage Insurance (PMI) is a type of insurance specifically designed to protect lenders in case a borrower defaults on a mortgage. It is often required for homebuyers who seek a conventional loan with a down payment of less than 20%.
Understanding the conditions and implications of a Private Mortgage Insurance (PMI) default can prevent homeowners from stakeholders from encountering unwanted financial hardships. Private Mortgage Insurance (PMI) is an insurance provided by private companies on conventional loans, ensuring lender protection in case of borrower default, especially when higher loan-to-value ratios are involved.
