[VIDEO] – Is Mortgage Insurance Required and What are your Options?

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Welcome back to the Capital City Real Estate Group video blog! I’m Marc Iafrate, Broker-in-Charge of the Capital City Real Estate Group here in Raleigh. Today we are going to discuss Mortgage Insurance and your options.

What is Mortgage insurance and what does it mean to me as a borrower?

Finding a proper mortgage loan and understanding the processing procedures behind the loan is the basis of good research during the home purchase process. Most loan applications with less than 20% down payment are required to include mortgage insurance with the loan.

Underwriting Requirements

Most home mortgage applications undergo a strict set of standards for approval. This approval process is known as underwriting. The idea behind mortgage insurance is that the less a borrower puts down, the higher the risk is to the lender. Mortgage insurance is a way that lenders can obtain insurance against a default.

Most underwriting requirements require adequate information on the borrower’s credit and employment history for a complete application. Self-employed individuals or those with alternative forms of credit may need a few additional hoops to jump through when dealing with mortgage requirements.

Lender-paid Mortgage Insurance

Lender-paid mortgage insurance is a popular option with potential homeowners that seek to avoid the cost of Private Mortgage Insurance known as PMI. Most lenders incorporate payment of private mortgage insurance in exchange for a slightly higher interest rate. As with anything, you’ll always want to speak with a mortgage professional before you make any decisions so that they can fully explain all of the positive and negative aspects of the different loan types out there.

What’s Involved With Risk Assessment?

Strict lending requirements and banking policy now limit the number of mortgages with zero down payment options. There are few exceptions, including VA loans but conventional mortgages and FHA both require private mortgage insurance if it is less than 20% down payment. However, FHA loans can be more flexible with the initial down payment requirements with adequate credit. FHA mortgage costs are now for the life of the loan which is why it’s a great idea to speak with a loan officer to ensure you are making good decisions.

Lenders look at mortgage insurance as risk protection.

The risk protection process may or may not require mortgage insurance in your home loan. Conventional loans have a reduction in risk once there is at least 20% equity in the home.

Contact the brokers at the Capital City Real Estate Group for a list of lenders that you can start with. There are a lot of questions you need to be asking so let’s get the process started today!

To search all homes for sale in the Raleigh area and surrounding communities, visit this link to our website http://search.capitalcityrealestategroup.com/search-landing.php

Marc Iafrate, MBA
Broker-in-Charge, Realtor
Capital City Real Estate Group
(919) 390-7810 Office
8319 Six Forks Road, Suite 201
Raleigh, NC 27615

About Capital City Real Estate Group, Inc.

Moving to North Carolina years ago was the best decision my family and I could have made. We were looking for a change from the cold Michigan winters and the volatile economic climate. The Triangle was the perfect choice with its mild winters, quality of life and diverse economic base.

I have always held as my personal values and guiding principles: Professionalism, Integrity, Dependability and understand the meaning of perseverance!

I began my real estate career in 1996 as a commercial investor. This led to a Director of Property Management position for multi-family and commercial property and now, residential real estate as the Broker/Owner of the Capital City Real Estate Group, Inc. here in Raleigh.

I put myself through the evening MBA program at the University of Michigan while working full time and raising a family.

Prior to real estate, I earned a Master of Science in Engineering from U of M and currently hold 2 U.S. Design Patents and had a successful corporate career in the automotive industry. As a result of that experience, I’ve successfully been able to apply my problem solving ability to business.

Community Involvement

Wake Forest Downtown, Inc. Board of Directors
Wakefield Rotary Club of Wake Forest, NC Board of Directors
Rotary Club Secretary position
Paul Harris Fellow

In addition to the Rotary Club, I support causes which strengthen our local community such as the YMCA – We Build People Program and Habitat for Humanity
My wife’s favorite charity benefiting children is The Angel Tree
We participate in our church food and clothing drives to benefit our local community
We also support the American Cancer Society, the Alzheimer’s Association and the Humane Society

Professional Associations

North Carolina Real Estate Broker License
South Carolina Real Estate Broker License
National Association of Realtors (NAR)
North Carolina Association of Realtors
Raleigh Regional Association of Realtors
Coastal Carolina Association of Realtors

We are committed to delivering outstanding customer service!

Marc Iafrate, MBA
Broker-in-Charge/Owner
Capital City Real Estate Group, Inc.
Raleigh, NC

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