When it comes to FHA mortgage insurance, it is an insurance placed on your FHA loan in the event you were to default on the loan. Lenders are able to make a claim against the insurance. Any losses that are incurred from your defaulting on the loan are repaid to the lender. This particular type of insurance helps minimize the risk associated with lenders providing a loan to those who only have a small down payment.
At MortgageDepot, we work hard to make sure you understand what FHA mortgage insurance means for you. It is important that you know what you are doing when it comes to getting a mortgage, so we work hard to explain all of the ins and outs of the process to you. Our goal is to make sure you understand what is expected of you as the buyer. When you get an FHA loan, the mortgage insurance lets you place a minimal amount of money down on the purchase of the home. In return, you will be able to finance the mortgage insurance to help insure the loan.
Banks and other institutions can lend money to anyone who qualifies for the FHA loan knowing that if the loan defaults the loss will still be repaid. When you have mortgage insurance in place, it makes the loan appear more attractive to potential lenders. The loan can easily be sold to an investor, which will free up capital to the lender and make more loans available to those in need. Understanding the complexities of mortgages is difficult enough, but it doesn’t have to be that way with the help of our professionals at MortgageDepot. We will take the time to listen to what you have to say and explain the loan to you in detail.