Author: Altitude Home Loans

A Guide to Financial Planning for Buying a House

Written by Altitude Home Loans on November 30, 2023. Posted in Home Buying.

Buying a new home is an exciting time, but it’s also a potentially stressful endeavor for buyers and sellers alike. Being fully prepared could make the process smoother, helping you settle down in that new home much sooner.

Are you looking at homes in Arizona or California? Altitude Home Loans is one of the best mortgage lenders in Tucson, Arizona, and beyond. When it comes to financial planning for buying a house in this area, our specialists have the guidance you need for a fast closing, including a few vital steps discussed below.

Monitoring Your Credit Score Pays For Itself

Why look into boosting your credit score? A higher score is always beneficial, particularly when buying a house. Credit scores determine your options for interest rates, so maximizing it pays dividends.

Take a careful look at your spending habits and develop a plan for improving your score by establishing a budget and cutting unnecessary costs. The higher you get your credit score, the lower your mortgage’s interest rate should be.

Saving For a Down Payment Opens Up Your Home-Buying Options

Having a hefty down payment widens your mortgage options considerably. Typically, a down payment of at least 20% will help you avoid needing private mortgage insurance. PMI keeps the mortgage company safe if you default on your loan, but it costs anywhere from 0.05% to 1% of your total loan (until your equity reaches 20%), which is a major cost.

Gathering All the Necessary Paperwork Saves Time

Buying a home always involves a stack of paperwork. Having it all ready long before starting the process makes the entire process less stressful.

Gather the following documentation as a start:

Two recent state and federal tax returns
Two months of pay stubs
Two months of bank statements
A list of all current debts

Once you’ve got all the necessary paperwork, create an organized file so that you’re ready for your mortgage lender.

Considering All the Expenses Unburdens Decision-Making

Another step during financial planning for buying a house is adequately considering your future commitments. Owning a home comes with a long list of expenses, from the initial closing costs to yearly property taxes and maintenance.

One solution would be to establish a savings account for ongoing expenses and another one for emergency home-related expenses to ease the burden of these costs long-term.

Getting Pre-Qualification or Pre-Approval Accelerates Things

Pre-qualification is a fast process that gives you an estimate of the home you can afford. The process uses self-reported income, debts, and a mortgage calculator for a realistic idea of your price range.

Note that pre-approval is a separate process. Your lender reviews verifiable financial documents before determining how much they’re willing to give you. Having the paperwork ready that we mentioned earlier helps.

Financial Planning Assistance with Altitude Home Loans—Arizona

If you’re buying a house in the Tucson area, Altitude Home Loans make it a smooth, speedy transaction for you. Financial planning for buying a house is easier with proven mortgage process steps and experts on hand. So, get into the home of your dreams—call 520-500-1010 today.

How Long Should You Keep Mortgage Statements?

Written by Altitude Home Loans on October 30, 2023. Posted in Mortgage.

Are you tired of papers piling up and file cabinets overflowing? If you’re looking to minimize your accumulating paperwork, you’re probably wondering, “How long should you keep mortgage statements?”

As some of the best mortgage lenders in Tucson, Arizona, Altitude Home Loans wants our borrowers to lead financially secure lives. Keep reading to discover when we advise getting rid of your mortgage statements, and to learn more, call 520-500-1010.

Types of Mortgage Statements

You likely have many of the following types of mortgage statements.

Monthly Statements

Your monthly statements are the least important document to keep, as your lender has copies as well. However, you should keep them for about three years — longer if you notice a mistake in one of them. While you can access your copies online, it’s always good to keep physical copies in a safe location.

Closing and Seller Disclosures

Keep these documents for at least a year after closing. The closing documents discuss the fees you paid, and in some cases, you can use them for tax deductions, which requires you to have the document in your possession.

The seller document reveals any problems with the home the sellers are aware of before closing. Keep this until you’re confident no existing problems will manifest in your home.

Deed

The government recommends you keep a physical copy of your deed for as long as you own your home. However, one exception is if you’ve paid off your mortgage and officials record your ownership in land records. Then, you can get rid of your deed’s physical copy.

Promissory Note

This document outlines your obligation to pay back your mortgage to your lender. Keep it for as long as you own the property or until you pay off your mortgage.

Purchase Contract

How long should you keep mortgage statements? Keep this document for two or three years in case you need to bring a case against the sellers. Along with the seller’s disclosure, it contains important information about the home’s condition.

Renovation Records

Keep all records of repairs and renovations as long as you own the home. You’ll need these documents if you sell your home to help calculate your capital gains tax.

Home Warranty

Keep your home warranty documents for as long as you have coverage, including if you renew the policy. The document is the quickest way to determine your policy covers and how to obtain help.

Home Inspection Report

Keep your inspection report for two or three years. The report acts as evidence concerning the state of your home and appliances. It can help remind you how long these items should last and when you should start saving for repairs or replacement.

Learn More By Contacting Altitude Home Loans

So, how long should you keep mortgage statements? It depends on the document, the condition of your house, and mortgage repayment terms. The team at Altitude Home Loans maintains an open-door policy and collaborative approach to lending. From your mortgage commitment letter through to your last payment, our process relies on integrity and compassionate service.

Call 520-500-1010 to learn more about home loans.

What Is a Warranty Deed and How Does It Protect You?

Written by Altitude Home Loans on September 30, 2023. Posted in General.

While purchasing a house is an exciting endeavor, deed transfers and understanding your new responsibilities can make the process a bit more complicated. Prospective home buyers should learn about warranty deeds as a way to protect themselves and others.

Learn the answer to “What is a warranty deed?” and the importance of having one as a property owner. If you still have questions after reading or are considering lending options for your mortgage, contact Altitude Home Loans, the best mortgage lenders in Tucson, Arizona.

What Is a Warranty Deed?

Warranty deeds are the contract or documentation that verifies that a property’s seller has their title without any obstacles (liens, mortgages, etc.). It shows that there are no outstanding claims or fights for ownership of the property, verifying the buyer won’t have problems in this area.

Having a warranty deed can help a buyer with mortgage financing and title insurance. The seller becomes responsible if problems arise and they breach their agreed-upon contract. If a buyer purchases a property from a stranger, it’s an excellent idea for them to acquire a warranty deed.

What Are the Main Types of Warranty Deeds?

The types of warranty deeds you should learn about and may encounter include the following:

General Warranty Deed. What is a warranty deed? This is the most popular type of warranty deed and provides property owners the highest level of protection. It helps them rest assured, knowing the home has no problems, including those from past owners.
Special Warranty Deed. Special warranty deeds offer similar protection but do not include title problems before the seller’s ownership. This deed will hold the seller responsible for the time they owned the home but not actions prior to their ownership.
Statutory Warranty Deed. These are like general warranty deeds, shifting ownership of a property between the seller and the buyer. However, you can obtain one through the state’s statutes, but some of the title history is unclear. It’s still legally binding and offers a fair amount of protection.

While people are looking for more ways to make homeownership more accessible despite today’s challenges, having a warranty deed can help.

How Warranty Deeds Protect Property Owners

Having a warranty deed means you can obtain the title to the property without issues. You’ll also know that you won’t have to face any outstanding title problems.

Obtaining a warranty deed is possible by contacting your real estate agent’s office or filling out an online template. The deed must have a description of the property, buyer signatures, the transaction date, the names of anyone involved in the process, and any title defects.

Other Related Types of Deeds to Know

Besides warranty deeds, you might hear about some of these related deeds:

Deed in Lieu
Quitclaim Deed
Special Purpose Deed

Receive Guidance on Your Home-Buying Journey with Altitude Home Loans

We hope you now understand “What is a warranty deed?” and have a deeper understanding of deeds while purchasing properties.

Altitude Home Loans can assist you with the mortgage process and answer any other questions you may have. Call us today at 520-500-1010 to get started!

When Is a Reverse Mortgage a Good Idea?

Written by Altitude Home Loans on August 30, 2023. Posted in Mortgage.

Is a reverse mortgage a good idea? For homeowners who don’t know the ins and outs of lending, this topic can be quite confusing.

Fortunately, this guide from some of the best mortgage lenders in Tucson, Arizona, can help you navigate your finances and settle any debates regarding a reverse mortgage loan. If you’d like some help, you can also contact experts like Altitude Home Loans to find some clarity on the matter.

What Is a Reverse Mortgage?

A reverse mortgage is a special type of home equity loan exclusively available for homeowners above the age of 62. Borrowers can tap their home equity (usually over 60% of the home’s value) to receive payments so that they can continue living in the house.

The lender you choose will calculate the loan-to-value ratio before making an offer. The figure indicates whether the home’s current market value could potentially cover the loan amount still outstanding on the mortgage. It’s important because you or your heirs will need to pay off the loan, and you’ll have no trouble repaying the lender up to the value of the house.

With a reverse mortgage, you get the equity portion back in monthly payments, a lump sum, or a line of credit from the lender. A financial planning professional can help you navigate which type of payment will suit your needs. However, note the following:

While you won’t have mortgage payments, you will still need to cover your property taxes, homeowners insurance, and other related expenses.
The balance of the loan will go up every month since fees and interest rates accrue.
Typically, you’ll have one year to repay the loan if you move out prior to closing out the reverse mortgage loan.

When Is a Reverse Mortgage a Good Idea?

So, when is a reverse mortgage a good idea if you’re an eligible homeowner? Consider taking out a reverse mortgage for the following:

Pay expensive medical bills or debts.
Cover your monthly expenses.
Make your home more accessible with costly home improvement projects.
Help your family with finances.

The supplemental payments you receive through this loan can be a significant help. You don’t need to be struggling financially to take out a reverse mortgage loan, either. For instance, you might choose to put the money toward paying for a grandchild’s college expenses.

Are There Drawbacks to a Reverse Mortgage?

While there are certainly times when a reverse mortgage is ideal, there are a few drawbacks. For example, these loans tend to come with higher fees and closing costs. They also cost more to pay off due to accruing interest fees, which are not tax-deductible.

Also, keep in mind that scammers who prey on seniors research this loan, too, so only turn to a trusted lender.

Speak With a Mortgage Specialist From Altitude Home Loans Today!

Is a reverse mortgage a good idea for you? Can you focus only on principal reduction in mortgage payments? Contact Altitude Home Loans at (520) 500-1010 or submit a request online today to connect with a specialist who can set you on the right financial path!

What Is Principal Reduction in Mortgage?

Written by Altitude Home Loans on July 30, 2023. Posted in Mortgage.

Falling on hard times makes diligent mortgage repayments more challenging. In the past, homeowners with negative equity were able to access principal reduction programs. But today’s property owners need to look elsewhere.

What is principal reduction when it comes to your mortgage loan? Below, Altitude Home Loans discusses mortgages and home purchasing in Tucson, AZ. Read on, and be sure to call us if you’d like to know more.

What Is Principal Reduction?

The idea of principal reduction involves decreasing the amount someone owes on a loan, not counting the interest portion. Finding ways to reduce the principal amount ensures borrowers have an easier time repaying the loan. It also alleviates the risk of foreclosure and reduces the total interest owed over the term.

During 2008’s subprime financial crisis, the market crash meant that many homes ended up with negative equity (they were worth less than originally invested). Lenders agreed to drop the principal balances of their loans to aid distressed borrowers. This move kept people in their homes and averted the foreclosures that mortgage companies might have had to deal with.

That’s also why programs like the Hardest Hit Fund (HHF), HAMP, and Principal Reduction Modification became available.

How Principal Reduction Helped Homeowners and Banks

So, what did principal reduction do for homeowners? And why did the government and banks encourage these programs?

Foreclosures leave property owners without homes and banks financing losses. Homeowners of the past would usually take mortgages they couldn’t afford, betting on getting more money for selling their property as real estate prices increased from year to year. However, when property values decreased instead, there was a collective inability to pay, and countless homes dipped into negative equity.

With principal reduction programs, struggling homeowners remained in these houses and tried to get back on their feet.

Two Principal Reduction Programs Examples

The main principal reduction programs were the Principal Reduction Modification Program and Home Affordable Modification Program.

Principal Reduction Modification. The Federal Housing Finance Agency began this program in 2016 for Fannie Mae or Freddie Mac loans. The borrowers had to owe $250,000 or less and meet several criteria.
Home Affordable Modification Program (HAMP). Borrowers had to show they were experiencing financial hardship. And the property could not be unlivable or condemned. This program ended in 2016.

What to Do If You’re Struggling to Pay Your Mortgage

While previous principal reduction programs are no longer an option, it isn’t only loan forgiveness that potentially reduces how much you have to pay back. Some property owners are able to pay their mortgages off early. If that’s not you, looking into ways to reduce your mortgage payment or get help with your mortgage is still essential.

Why not ask for a loan modification or loan forbearance for a short period? Refinancing can also lower monthly repayments.

Learn More About Mortgage Assistance

What is principal reduction able to achieve for today’s homeowners? Altitude Home Loans would love to tell you more about it. We have extensive knowledge about how inflation affects housing prices, home refinancing, mortgages, and more, so call 520-500-1010 today for more information!

Mortgage Brokers vs. Lenders: What Are The Differences?

Written by Altitude Home Loans on December 30, 2022. Posted in Mortgage Brokers, Mortgage Lenders.

Buying a home is a big step in anyone’s life, and when it comes time for you, you need proper financing. Many people seek a mortgage loan for financial assistance but still need to figure out mortgage brokers vs. lenders. This short guide can help you determine whether a lender or broker could help you best in home buying.

Altitude Home Loans can pair you with an experienced mortgage broker in Tucson, AZ, and will discuss all available options. Read more about the differences between essential mortgage parties, and then contact Altitude Home Loans at 520-500-1010.

Mortgage Brokers

Mortgage brokers help you find the best lender but do not provide financial assistance to fund the purchase of your house. They know about many lenders and can find one that will help your specific needs. Brokers are the “matchmakers” between you and the lender.

Brokers can help you compare all loan options and show you programs that may be ideal for you. Mortgage brokers work based on their client’s financial information and credit scores, and you may find more affordable lending options with their assistance.

Pros of Working with Brokers

Mortgage brokers can provide you with multiple lending options and allow you to shop around. You will compare all potential choices and work with someone who can find a match, no matter your financial circumstances. Brokers have connections and access to information that can benefit you.

Cons of Working with Brokers

Working with a broker might not be what you’re looking for as an experienced buyer. Some lenders pay brokers to recommend them to clients, and your broker could charge a fee on top of your loan cost. Be wary if your broker is directing you toward a more expensive loan option.

Mortgage Lenders

Your other option when comparing mortgage brokers vs. lenders is a lender. A mortgage lender is often a credit union or bank that determines if your financial background makes you a reliable choice for a loan. Some lenders are private companies that operate online to provide fast approvals and more support to buyers.

You will repay your lender’s loan over time and use the money to purchase a home. Lenders offer funding, while a broker merely connects lenders and buyers.

Pros of Working with Direct Lenders

Working with mortgage lenders may be quicker because they are selective about who will borrow their money. Many lenders operate throughout the country and can loan you money in any state, giving you more options.

Cons of Working with Direct Lenders

Direct lenders may only accept your loan application if you meet their specific criteria. You are responsible for obtaining your financial documents and information for the lender to review. For every lender, you must complete a new application.

Receive Mortgage Loan Assistance with Altitude Home Loans

The Altitude Home Loans team can help if you need a mortgage broker and are purchasing or refinancing a home. Call us today at 520-500-1010 to discuss mortgage loans and lending options in Tucson. We understand whether mortgage brokers vs. lenders suit your needs and are ready to help.

Do I Need a Mortgage Broker? What You Need to Know

Written by Altitude Home Loans on November 30, 2022. Posted in Mortgage Brokers.

Buying a home presents challenges for first-time buyers and experienced homeowners alike. If you need financing for your next home, you don’t have to navigate the mortgage process by yourself. You can work with a professional mortgage broker and get the loan you need at competitive terms.

Learn more about mortgage brokers and their role in the mortgage process by contacting our team at Altitude Home Loans, Tucson’s top-rated mortgage broker.

Many home buyers ask themselves, “Do I need a mortgage broker?” If you are among them, keep reading to learn everything you need to know about mortgage brokers.

What Is a Mortgage Broker?

Mortgage brokers do not lend money to homebuyers. Instead, they act as intermediaries between mortgage lenders and home buyers. When you consider the question, “Do I need a mortgage broker?” keep the mortgage broker’s role in mind.

Benefits of Working with a Mortgage Broker

When speaking with a mortgage broker, you will discuss your budget for the house you want, your finances, the monthly payment you can afford, and other information about the kind of loan you want. The mortgage broker will use this information to find mortgage lenders that offer the best rates.

The mortgage broker helps lenders as well. Banks and other institutions that lend money often have trouble finding suitable borrowers for their loan type. Mortgage brokers help by connecting them with quality applicants.

Banks also benefit if the homebuyer receives help preparing documents. Lenders often offer better rates to borrowers who work with a broker.

Explore Your Loan Options

One benefit of working with a mortgage broker is the increased chance of finding a loan matching your goals and financial circumstances. Homebuyers who contact financial institutions directly can waste time applying for loans with lenders that don’t offer the loan products they need. You might need a mortgage broker if you:

Have a limited or checkered credit history
Are a veteran
Are potentially eligible for government programs that provide low-interest loans.

Navigating the Loan Application Process

Even if you know what kind of loan you want to apply for and the type of financial institution you want to contact, a mortgage broker can help you with the paperwork and the process by doing the following:

Assess your financial situation.
Explain fees and negotiate with lenders to waive some fees.
Prepare financial statements.
Submitting applications.

When answering the question “Do I need a mortgage lender?” keep in mind that the mortgage lender is working for the lenders and their own interests as well as yours.

Speak to a Broker at Altitude Home Loans Today

If you’re unsure how to answer the question, “Do I need a mortgage broker?” talk to a representative at Altitude Home Loans.

We have helped many Tucson homebuyers find their ideal loans. We can help you prepare the documents needed to refinance mortgage loans or apply for new mortgages. Call us at (520) 500-1010 to learn more about how the right home mortgage can improve your financial health or put you on the path to home ownership.

The Documents Needed to Refinance Mortgage

Written by Altitude Home Loans on September 30, 2022. Posted in Refinance Mortgage.

The process of refinancing your mortgage can be lengthy, sometimes dragging on for weeks. One way to speed up the process is to gather the documents needed to refinance your mortgage early so you can provide them as soon as the lender requests them. Speaking to a qualified mortgage broker in Tucson, AZ, will also help you to complete the process as quickly and efficiently as possible.

When you submit your refinancing application, you’ll need to provide proof of income, insurance and credit verification, and statements of your debts and assets. Let’s examine these documents in detail so you know what to expect.

Proof of Income

Lenders need to know that you can make the monthly payments on your home loan and keep up with your existing debts and living expenses. No lender wants you to have to choose between essentials like rent and your loan payments. Your proof of income is one of the most important documents needed to refinance a mortgage because it informs your mortgage company about your financial situation so it can determine whether you can take on more debt.

Your income documents usually consist of pay stubs, tax forms (such as W2s), and bank statements. You can request pay stubs and W2s from your employer’s human resources department. Tax returns and bank statements showing deposits will be essential if you are self-employed.

Insurance Information

When you want to refinance your mortgage, lenders ask to see proof of insurance on the home, which will show them who owns the policy and whether you have maintained coverage. Documentation may include your homeowner’s insurance declaration page, agent’s contact information, and a deed for the home.

A lender may also request an appraisal of the home to determine its current value.

Credit Verification

Lenders always check your credit when you apply to refinance your mortgage, and this may include reviewing any mortgage credit certificates you hold. You simply need to give verbal permission to allow the mortgage provider to pull your credit report.

The lender may also request additional documentation, such as a letter explaining negative items on your credit. Bankruptcy discharge papers and statements that show your payment history (such as billing statements from utilities and credit cards) may also be appropriate.

Statements of Debt

Lenders will want to look at your existing debt to compare it to your income and determine how much breathing room you have. These documents typically include recent statements for mortgage payments, credit cards, loans, and any other debts.

Statement of Assets

Finally, lenders need to check if you have funds available to cover the closing costs. Some lenders require you to have 12 months’ worth of cash in a bank account. You’ll need to provide statements for any bank account from which you’ll be withdrawing money, including checking, savings, retirement, brokerage, or certificate of deposit (CD) accounts.

Learn More About How to Refinance a Mortgage

The documents needed to refinance your mortgage comprise a lengthy list. Still, the process doesn’t have to be complicated or intimidating. Call our experts at Altitude Home Loans at 520-500-1010 for answers to all your questions, such as “When are interest rates locked in?“

When Are Interest Rates Locked In? Read to Find Out

Written by Altitude Home Loans on August 30, 2022. Posted in Mortgage Interest Rates.

Mortgage rates fluctuate daily, sometimes even hourly. A mortgage rate lock, or rate protection, locks in your mortgage rate, keeping it from rising from when you apply for your mortgage to when you close on your loan. But when you’re buying your home, exactly when are interest rates locked in?

Timing is imperative when choosing to lock your mortgage rate because if you lock it and the rates decrease, you still pay the original rate.

Here at Altitude Home Loans, our team of trustworthy mortgage brokers in Tucson, Arizona, is here to guide you through the process of purchasing a home every step of the way. We make the process easy, from beginning to end.

Why Do Mortage Rates Change?

Mortgage interest rates are directly affected by the current market. If the economy is thriving, interest rates usually increase. However, if the economy is in a slump, rates usually decrease in hopes that low rates will encourage economic growth.

The Federal Reserve keeps inflation under control by handling the federal funds rate. The federal funds rate is the rate that financial institutions can borrow money. The changes in the federal funds rate cause interest rates to rise or fall.

Interest rates tend to increase when there is a high demand for purchasing homes. If the homebuying demand is lower, interest rates usually decrease to attract potential homebuyers.

When Are Interest Rates Locked In?

Your mortgage interest rate locks in after your home loan lender approves your loan application and you accept the purchase contract. Once you have an approved purchase contract with an established closing date, you are committed to the interest rate outlined in the contract. Keep in mind the period of time when the interest rates are low enough for you to afford your mortgage payments, including the closing costs, in your budget.

A rate lock period ranges from 15 to 60 days. Some factors that may affect the ability to lock your mortgage rate or change the rate that was originally offered are:

Changes in your financial situation
Changes in your credit score
- Opening a new line of credit while acquiring a mortgage has the possibility of changing your debt-to-income ratio, thus impacting your credit score
Changes regarding your application

Learn More About the Mortgage Process

There is a great deal involved in purchasing a new home. In addition to searching for the perfect home, applying for and acquiring a loan from mortgage lenders, and locking in a mortgage rate, new homeowners should also learn more about the difference between MIP and PMI.

Our team at Altitude Home Loans is here for you every step of the way. We can help answer the question, “when are interest rates locked in?” We offer conventional, fixed-rate, and floating mortgages and have mortgage programs for first-time home buyers. We also have a downpayment assistance program!

Call us today and review your options with our team of experts at Altitude Home Loans, the 2021 Reader’s Choice Award Winner in the Arizona Daily Star, at 520-500-1010!

Understanding the Difference Between MIP and PMI

Written by Altitude Home Loans on July 25, 2022. Posted in Mortgage.

Owning a home remains a significant aspect of the American dream, but it’s more complicated than many realize. As potential homeowners begin obtaining a mortgage, they quickly discover that they need mortgage insurance, a good credit score, and a regular income. To help simplify some of this, here’s a look at the difference between MIP and PMI and how they may affect home loans in Tucson by Altitude Home Loans.

What Is Mortgage Insurance?

When speaking with a mortgage company for the first time, many home seekers expect to pay a minor downpayment on their ideal home. Sticker shock sets in when they learn that most lenders need at least a 20% downpayment on the total of their home’s purchase price. Lenders know that most people don’t have that kind of money, using mortgage insurance to fill that gap.

Mortgage insurance allows you to put a lower downpayment on your home. However, a lower downpayment makes you look less invested in the long-term ownership and payment on a home or property. With mortgage insurance, your mortgage lender has protection if you can no longer make your monthly mortgage payment.

Defining MIP, or Mortgage Insurance Premiums

MIP protects federally backed loans. Typical loans covered by MIP include FHA (Federal Housing Administration) loans and first-time home buyer loans. Borrowers with low credit, low income, and an inability to pay a significant downpayment benefit from MIP.

An upfront mortgage insurance premium, or UFMIP, equals 1.75% of a home loan’s total amount and tacks that additional amount onto loan closing costs. Your monthly mortgage payment includes an equally-divided annual premium for your mortgage insurance, usually .45% to 1.05% of your loan split into 12 payments.

With mortgage insurance premiums, borrowers may pay as little as 3.5% down on their home purchase. They may also receive a better interest rate on their loan, though they may pay more for their mortgage insurance than PMI borrowers. Understanding the difference between MIP and PMI helps you choose which option fits you best.

Defining PMI, or Private Mortgage Insurance

PMI offers greater term flexibility to eligible home buyers who qualify for conventional mortgages. The cost of private mortgage insurance depends on factors such as loan amount, credit score, and annual household income. Generally, PMI borrowers present a lower foreclosure risk to mortgage lenders.

If you choose to pay for a home with a conventional loan, know that PMI may range from .5% to 2% of your initial loan amount. Most homeowners can expect their PMI to be around 1% of their loan. PMI payments typically cost significantly less than MIP.

Can I Cancel Mortgage Insurance?

You can request the removal of PMI after you’ve reached 20% of your home equity. FHA MIP requires that you make a down payment of more than 10% of the home loan to qualify you for cancellation. If you don’t pay at least 10% down, you must pay for MIP throughout your loan’s lifetime.

Are you interested in purchasing a home in Tucson, AZ? Contact Altitude Home Loans to pre-qualify today. Learn more about Private Mortgage Insurance and about the difference between MIP and PMI.