With property prices rising, it is becoming difficult for average homebuyers to pay enormous down payments and this is where mortgage insurance emerges as an ideal option. In case a buyer is unable to make a high down payment, then mortgage insurance keeps him covered and also protects investors and lenders from possible default in case of non-repayment of mortgage.
It is definitely a safe and useful option for both borrowers and lenders, however varying insurance rates can make it difficult for people to choose the best mortgage insurance available. Primarily insurance rates vary depending on lender, the amount of down payment, as well as other factors which individual insurance companies take into consideration. A recent addition in this list is the credit score of the borrower which can also have a major impact on the mortgage insurance rate, as good credit score is considered equal to better rate.
The repayment options you select can also be a reason why insurance rates can vary. Mostly borrowers opt for monthly payments, while others decide to either pay in full or up front. Keeping a track of all these factors can sometimes prove difficult, especially for first time home buyers deciding to opt for mortgage insurance, so professional assistance might be helpful.
The best way to assure that you are getting the best insurance rate possible is to stay updated with current rates, as well as get a quote from the insurance company, as they will give you a detailed estimate of how much premium you will pay over the term.