Single Premium Mortgage Insurance

Many people are looking to take the large life changing step of purchasing a new home, maybe their first one, or just an upgrade. Many of those people do not have the means of purchasing their dream home in their current financial situation so they have to carefully weigh their options with loans and financing.

We've explained about different types of mortgages and different types of mortgage insurance. Having mortgage insurance is a plus, because it ensures the lender will be taken care of in the event of an emergency. Here is a deeper look into another type of mortgage insurance, Single Premium Mortgage Insurance. With this type of mortgage insurance, the borrower pays with one single payment at closing.

This name single premium refers to the mortgage insurance being financed as a portion of the loan amount, so this means that you will not have to pay upfront. With this type of insurance you are offered special tax advantages, and it could possibly provide you a very large monthly savings. Another advantage is when the borrower chooses to cancel the insurance or sells the home; any unused part of the premium is refunded.

Since you are taking out this loan with a lower monthly payment you will most likely be able to take out a larger loan then you'd really be able to afford, since the payments are low, and taking out a larger loan means more tax deductions. These insurance types can also be used for life insurance plans. So if you are looking to protect yourself in the event of emergencies, look into a mortgage insurance and see which one suits you the best.

Contributing National Payday Staff Writer

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