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Rainmaker
1,228,961
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Those that would not be capable of buying a home can when mortgage insurance is implemented.   But those buyers are more risk for a Lender, so the mortgage insurance provides them protection, should the Borrower default.  Buying/financing with mortgage insurance involved can be a "win win" for both Borrower and Lender ... and housing markets too ..

Jun 01, 2017 11:54 AM
Ambassador
2,354,904
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

In theory, it allows the borrower to make a lower downpayment.   The insurance protects the mortgagee in case of default.

In reality, mortgage insurance lines the pockets of the investors behind FNMA and FHLMC.

Jun 01, 2017 01:17 PM
Ambassador
1,640,098
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

It helps to get the loan.

Jun 01, 2017 02:34 PM
Rainmaker
926,752
Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Ask Jason E. Gordon As far as I see it, it's just another expense as a buyer. But, a necessary evil to get the loan approved.

Jun 01, 2017 08:57 AM
Rainmaker
1,157,274
FN LN
Toronto, ON

It depends upon the terms and conditions of the insurance contract.

Jun 01, 2017 08:11 AM
Ambassador
3,982,999
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Mortgage insurance protects the investor/lender on high ration loans. It does have a benefit for the borrower in allowing less downpayment and higher loan to value ratios than are more commonly required.

Jun 01, 2017 08:01 PM
Rainmaker
1,064,509
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

Great question for a licensed mortgage broker...

Jun 01, 2017 06:26 PM
Rainmaker
1,218,042
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

See Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi answer.  He is mortgage expert.

Jun 01, 2017 04:37 PM
Rainmaker
3,011,117
Richard Weeks
Dallas, TX
REALTOR®, Broker

If there is some claim to the property it will insure the lender and the borrower.

Jun 01, 2017 11:24 AM
Rainmaker
1,013,620
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Do not give a hoot. Your question was be valid if the mortgage industry was regulated.  It sounds like your teaching material for studing exam is way dated. 

Jun 01, 2017 11:12 AM
Ambassador
891,162
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

A deduction for a buyer, and the only thing allowing them to purchase with less than 20% down (even all those "10% down with no PMI" lenders are incorporating PMI into their rate), so it's a huge benefit to buyers without a large down payment.

 

To a lender, it's a security blanket, as they don't get fleeced in the instance of default.

Jun 01, 2017 10:18 AM
Rainmaker
1,533,635
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

lender only - they are planning on foreclosure on you at the closing.

Jun 01, 2017 09:56 AM
Rainmaker
1,320,178
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

It depends on the type of mortgage:   Mortgage insurance is a security benefit for the lender and a requirement for the buyers to pay in order to secure the loan... depending on the down payment percentage.

Jun 01, 2017 09:41 AM
Ambassador
4,210,135
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Covers a lot of risk for the lender.

Jun 01, 2017 09:35 AM
Rainmaker
1,375,717
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Brian Burkhalter It allows buyers to put down less than 20% and protects lenders should the buyer default.

Jun 01, 2017 09:09 AM
Rainmaker
4,440,943
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Brian,

Corinne Guest, Managing Broker answered the question. A

Jun 01, 2017 08:27 AM
Rainmaker
1,011,950
Corinne Guest
Corinne Guest, REALTOR® | Barrington Realty Company - Barrington, IL
Barrington Lifestyles

Insured.

Jun 01, 2017 08:12 AM
Rainmaker
1,490,499
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Mostly it protects a lender in case the borrow defaults on the loan.

Jun 01, 2017 11:55 PM
Ambassador
3,310,240
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Listen to Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - He knows what he's talking about!

Jun 01, 2017 09:37 PM
Rainmaker
1,542,110
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi answered your question

Jun 02, 2017 07:45 AM
Rainmaker
3,088,818
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

What Fred Griffin said.

Jun 02, 2017 05:59 AM
Rainmaker
3,053,038
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi nailed this one!

Jun 02, 2017 05:52 AM
Ambassador
4,300,186
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Brian Burkhalter - well, lenders now trust the borrower with higher mortgage amount than otherwise they could qualify for.

Jun 01, 2017 11:00 PM
Rainmaker
3,982,264
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Does nothing for the borrower

Jun 01, 2017 07:24 PM
Rainmaker
2,994,340
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Benefits the lender if you default. Benefits the buyer if there is an issue with the deed. 

Jun 01, 2017 06:20 PM
Rainmaker
3,812,683
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Thank you Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi !!

Jun 01, 2017 05:13 PM
Rainmaker
1,039,793
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Borrower benefits because if it weren't available they likely couldn't purchase the home until they had 20% down payment mortgage insurance makes it possible to put down much, much less money when buying a house. The lender benfits from the security of the loan above 80% of the LTV in the event of the home buyer defaulting. need home buying or selling info in Northern Virginia? #ComeHomeVA

Jun 11, 2018 07:15 PM
Rainmaker
61,566
Scott Thompson
Columbia Mortgage Plus - Blue Springs, MO
Commerical Finance - Blue Springs, MO

It was intended to restore the lender in the event of a default as original GSE guidelines only went to 80%.

The better question at this point might be, What is Fannie Mae?

You would think insurance covering the borrower would be a requirement.  Gap insurance that pays your mortgage in event you are unable to.

I only know of one company that advertises this but they talk out of both sides of their mouths so hard I am not sure I recommend them.

 

Make it a Great Day.

 

Jul 01, 2017 12:55 PM
Rainmaker
770,712
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

It benefits the lender.  But I suppose it benefits the borrow because they need it to get the mortgage. -kasey

Jun 02, 2017 10:18 PM
Rainmaker
5,375,216
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

It enables mortgage financing for many home buyers.

Jun 02, 2017 04:24 PM
Rainmaker
1,237,516
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Gene has your answer.

Jun 02, 2017 02:23 PM
Rainmaker
3,164,286
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Have one of the lender explain this.

 

Jun 02, 2017 12:06 PM
Rainer
52,073
Joe D'Agostino
NMLS# 729950 - Manahawkin, NJ
Mortgage Officer 46 years!

If you are talikg PMI / MIP it has no benefit to the borrower. This normally includes a Funding fee and in some cases (FHA) a monthly payment. It only protects the lender in deal with less then 20 % down.

 

Jun 02, 2017 10:32 AM
Rainmaker
2,789,675
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

That would be a great question to ask your real estate instructor who could implement all of these great responses into their teaching ... and actually teach their students versus sending them here. 

Jun 02, 2017 07:42 AM
Rainmaker
4,797,261
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

It benefits the lender only.

Jun 02, 2017 05:24 AM
Rainmaker
767,946
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

It is my belief that mortgage insurance benefits the lender

Jun 02, 2017 04:08 AM