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The Homeowner’s Protection Act (HPA) of 1998

The Homeowner’s Protection Act (HPA) generally applies to residential conventional mortgage transactions taking place after July 29, 1999. There is however requirements for loans obtained before that date which will be outlined in my next Blog. The HPA laws don’t apply VA or FHA government-guaranteed loans. There are also different requirements for loans classified as “high-risk.” Fannie Mae and Freddie Mac are corporations chartered by Congress to create a continuous flow of funds to mortgage lenders in support of homeownership. The HPA doesn’t outline what a “high risk” loan is; instead it allows Fannie Mae and Freddie Mac to issue … Continue reading →

Mortgage Insurance and Your Money

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If you own your home, do you know if you are paying out for mortgage insurance each month? Many people don’t. It is often one of those fine details that get lost in all the mess of paperwork and decisions that go into buying a new home. What exactly is mortgage insurance? It is insurance the bank that holds your loan will require in certain circumstances. The insurance doesn’t protect you, the homeowner, from any catastrophe. This insurance only protects the bank if you foreclose on your loan. A typical misconception is the insurance will protect you from losing your … Continue reading →

Private Mortgage Insurance (PMI)–What If Your Home Value Has Increased?

Most home buyers today are able to secure a mortgage loan with is little as 3-5 percent of the home value as a down payment. This has been a nice way for the average family to get into a home without waiting for years to save up the 20 percent down payments our parents had to scrimp and save years for in order to buy their first homes. One of the reasons lenders have been able to allow home buyers to secure loans with less then 20 percent down has been to add Private Mortgage Insurance (PMI). Loans secured after … Continue reading →

Property Mortgage Insurance (PMI) For Loans Opened Before July 1999.

My first suggestion to homeowners who currently have a loan opened before July 1999 is to consider refinancing. The chances are great that you may be able to obtain a new loan at a much lower interest rate even now as these rates are starting to climb. If for some reason it is not possible for you to refinance then you might want to review your loan documents and check your statements to see if you are paying Private Mortgage Insurance (PMI). Home buyer’s who put less than 20 percent down on a home mortgage, are usually required by the … Continue reading →

What is PMI–Private Mortgage Insurance?

The majority of us need some kind of financing in order to purchase a home. Many homeowners also elect to make monthly payments into an escrow account in order cover property taxes and insurance. The average house payment includes principal and interest, along with the escrow fees due and adjusted each year. However a large number of homeowners pay another charge every month known as “PMI” or Private Mortgage Insurance. PMI is usually required on conventional loans when the down payment is less than 20% of the loan. PMI protects the bank or lender when a home buyer defaults on … Continue reading →