What is Mortgage Insurance Premiums?
We are buying a house and we are trying to figure out what is mortgage insurance premium and how it is calculated?
We are buying a house in the bay area in California and is trying to figure out what is Mortgage Insurance Premium and how it is calculated?
- Nevaeh2morrowLv 51 decade agoBest Answer
This is the insurance that will pay your lienholder should you default on your mortgage. - in a nut shell explanation. It is based on the mortgage amount.
- DebdebLv 71 decade ago
Mortgage insurance is protection for the lender in case the borrower defaults on the loan. If the loan amount is more than 80% of the value of the home, it's required by all lenders who make Fannie or Freddie loans, which is pretty much everybody now.
The premiums are based on the loan amount and are also driven by your credit score and debt ratio, which are risk factors we consider when we think about how likely you are to repay the loan.