what is an origination fee on a mortgage

What Is an Origination Fee on a Mortgage?

One of the first things you’ll learn when buying a home is that the mortgage application process comes with several different steps and, unfortunately, fees. One of these is the origination fee.

As the best mortgage lenders in Tucson, Arizona, Altitude Home Loans knows that homebuyers tend to have a lot of questions about the mortgage application process. Here, we’ll answer, “What is an origination fee on a mortgage?”

Mortgage Origination Costs Defined

The origination fee helps cover different overhead costs that the lender has to pay when processing your loan. These can include payment for underwriters, appraisals, bankers, and more. By charging the origination fee, the mortgage company can earn more profit, generating enough money to provide mortgages to other homebuyers.

While an origination fee is common, not all mortgage lenders charge it. If you don’t see origination fees on your mortgage application, it’s likely because your loan has a higher interest rate.

Mortgage Origination Fee Explanation: How Does It Work?

What is an origination fee on a mortgage, and how does it work?

Unless you plan on paying with cash, you’ll likely need to apply for a mortgage when purchasing a new home. Like other types of loans, mortgages require you to pay additional fees during the application process, including the origination fee. 

Understanding mortgage loan origination fees starts with knowing how much they cost. Typically, a mortgage lender will charge between 0.5% and 1% of the total cost of your loan. For example, if your mortgage is $300,000 and your origination fee is 1%, you’ll pay $3,000 for the fee. 

A Breakdown of Origination Fees in Mortgages and Other Closing Costs

You will typically pay the origination fee with your other closing costs. Like the origination fee, the other closing costs are fees that help pay for the application process. Your lender determines the amount of these fees.

Although each lender will have a different fee structure, the following are the most common types of closing costs.

Application Fee

Separate from the origination fee, the application fee is a deposit that you get back when you close on your house. However, you may not get this money back if you don’t close, depending on the lender. 

Credit Check Fee

This fee is typically only $30 and covers the cost of the lender checking your credit score for the application process.

Escrow Fee

During the application and underwriting process, your money goes into an escrow account to protect your funds from unauthorized access. The fees help cover the costs of holding this account.

Get Help Decoding Mortgage Origination Fees With Altitude Home Loans

While applying for a mortgage includes several different steps, understanding what fees you’re responsible for paying and why they’re necessary can help you budget and enjoy a smoother process. 

What is an origination fee on a mortgage? To learn more about the importance of mortgage origination charges or the truth about mortgage loans, call Altitude Home Loans at (520) 500-1010. Get more information today.

what is a mortgage credit certificate

What Is a Mortgage Credit Certificate? 

Buying a home is an investment. The initial down payment plus closing costs often present substantial challenges for first-time homebuyers. 

As a result, several programs exist to enhance homeownership prospects for Americans, especially those in the low- to moderate-income bracket.  

One such program, the mortgage credit certificate, lowers the barrier to entry for those planning to purchase a home for the first time. But what is a mortgage credit certificate? As the best mortgage lender in Tucson, Arizona, Altitude Home Loans explains what you need to know about MCCs if you’re ready to buy a home. 

Mortgage Credit Certificate Described 

Mortgage credit certificates are certificates that mortgage lenders issue to qualifying first-time homebuyers. An MCC allows you to offset a percentage of your mortgage interest via a tax credit. To qualify for the MCC program, you must have a low to moderate income. 

An MCC may also help you qualify for a higher mortgage loan by increasing the monthly income that you can list on your application. You can use the credit to assist you in making monthly payments as long as the home remains your primary residence. 

An MCC is not a loan but rather a federal tax credit. Participating lenders provide information to their clients about the tax credit and apply to the State Housing Finance Agency for the certificate on their behalf. 

How MCCs Work 

What is a mortgage credit certificate? Unlike tax deductions, MCCs provide a dollar-for-dollar tax credit to qualifying recipients to increase their ability to afford housing payments. 

Sometimes, an MCC may help a borrower who might not otherwise qualify for a loan by reducing their net monthly mortgage payment. Qualifying home buyers who receive MCCs can then take a nonrefundable federal tax credit equal to a percentage of their annual mortgage interest. 

You may opt to take the tax credit when filing your tax returns or amend your W-4 withholding form to reduce the amount of federal income tax withheld from your paychecks. 

Tax credit percentages vary between states but typically range from about 10% to 50% of the total mortgage interest (up to a maximum of $2,000 for each MCC recipient). You may also deduct the remaining interest obligation as a standard home mortgage interest deduction. 

Benefits of MCCs

Mortgage credit certificates offer advantages like:

  • MCCs increase a borrower’s payment affordability. 
  • MCCs help lenders reach and qualify more borrowers with low-to-moderate incomes
  • Borrowers can couple MCCs with most first mortgage loans 

Potential Challenges of MCCs 

Mortgage credit certificates come with some potential downsides for borrowers:

  • The application, benefits, and limitations of MCCs can be difficult to understand.
  • Borrowers may be subject to recapture tax. 
  • State MCC programs depend on the availability of funds allocated to mortgage credit certificates.

Learn About the Mortgage Application Process With Altitude Home Loans

A tax or mortgage expert can ensure you properly take advantage of the MCC program and maximize your tax deductibility. 

Call our Altitude Home Loans home-buying experts at (520) 500-1010 to learn the truth about mortgage loans or for answers to questions like, “What is a mortgage credit certificate?”

how long should you keep mortgage statements

How Long Should You Keep Mortgage Statements?

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.

is a reverse mortgage a good idea

When Is a Reverse Mortgage a Good Idea?

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

What Is Principal Reduction 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!

difference between co-borrower and-co signer

What’s the Difference Between a Co-Borrower and a Co-Signer?

When filling out loan applications for the first time, you might notice that the application allows you to choose between a co-signer and a co-borrower. At first glance, the two terms seem the same. However, they have some pertinent differences.

What is the difference between a co-borrower and a co-signer? Below, our team of home-purchasing experts in Tucson, AZ,  at Altitude Home Loans defines these terms. Contact us at 520-500-1010 with any questions on the subject. 

What Does Co-Borrower Mean?

When you apply for a loan, you might fill out the application with your co-borrower. A co-borrower might purchase and live in a property with you. They have equal legal responsibility for repayment of the loan as well as access to the property.

Your co-borrower could be a family member, friend, or spouse with whom you intend to live. However, not all co-borrowers may live together. Regardless, you can each use the property as desired once you complete the purchase and move in together. 

What Does Co-Signer Mean?

A co-signer is helpful to an applicant whose credit report may not reflect optimal results for a low interest rate. You might choose a parent, grandparent, or long-term friend to co-sign on your loan application. They use their credit scores and financial security to improve your qualifications.

A co-signer bears the responsibility for repaying a mortgage if the buyer defaults on their payments. However, only the buyer or co-borrowers have ownership rights to the property. The co-signer has no authority over what happens to the property. 

The Similarities Between Co-Borrower and Co-Signer

Many people understandably confuse co-borrowers with co-signers. After all, the two bear many striking similarities. For example:

  • Both have some payment responsibilities regarding the property. 
  • Both put their signatures on the property paperwork. 
  • Both can make the acceptance application process much easier for the buyer. 

However, there exists a distinct difference between a co-borrower and a co-signer. 

The Difference Between Co-Borrower and Co-Signer

How do the two differ? Each person has a different set of risks that comes with their involvement, such as:

  • While the co-borrower can access and use the property as they see fit, the co-signer cannot. 
  • The co-signer may face a blow to their credit score during deep credit checks. 
  • If the buyer wishes to sell, they must consult and come to an agreement with their co-borrower. They don’t have to make an official agreement with their co-signer to sell the property. 

Each signature comes with its own pitfalls and advantages, depending on the situation. If you want to assist a loved one in purchasing a property, consult mortgage experts to find out which role best fits you.  

Discover More Important Information from Altitude Home Loans

The journey of purchasing and owning property can present a challenge, especially for first-time buyers. You’ll encounter many terms and options, like guarantor loans, that may sound unfamiliar. Our home-buying experts can help you seamlessly navigate your home-buying journey while ensuring you make the best decision for your family and finances. Call 520-500-1010 to apply for assistance or learn more about the difference between a co-borrower and a co-signer.

what is a mortgage commitment letter

What Is a Mortgage Commitment Letter?

Buying a home comes with lots of paperwork, including the mortgage commitment letter. What is a mortgage commitment letter, and what does it mean for your home-buying journey?

Our team at Altitude Home Loans offers home purchasing assistance in Tucson, AZ. We’ll walk you through the contents of a mortgage commitment letter so you better understand what it means for potential purchases. Call us at 520-500-1010 to learn more, and read on to learn all about how it fits into the process of buying a home.

What Is a Mortgage Commitment Letter?

Most people can’t afford to purchase property without financial assistance. That financial assistance comes in the form of loans from designated lenders. Before providing that assistance, the lender must carefully review multiple aspects of your financial health, including:

  • Your credit score
  • Your personal finances 
  • Your income
  • Your current assets 

After a thorough application review, the lender decides whether or not to pre-approve your application. 

So, what is a mortgage commitment letter, and how does it fit into all of this? A mortgage commitment letter is the document the lender sends to you after pre-approving your application for a loan.  

Types of Commitment Letters

While mortgage commitment letters are a positive sign, they don’t necessarily represent a resounding “yes” from the lender. There are two types of mortgage commitment letters with different meanings. Before you get your hopes up, review the letter to understand what it means.

  • Conditional mortgage commitment: This most common type of commitment letter means that the lender pre-approved your application. However, the lender hasn’t yet underwritten specific loan terms. At most, they’ve drafted potential terms to which they may agree. But you must meet their requirements first. 
  • Firm mortgage commitment: This letter specifically states the loan sum your lender offers to help you reach closing costs on a property. 

Each type has an expiration date. Any terms stated in the letter only hold value until that date. Although only firm mortgage commitments hold any official terms, both letters can show sellers that you’re serious about your offer.  

Why Are Commitment Letters Important?

While commitment letters don’t always guarantee loan approval, they do show that the lender considers you a viable candidate for a loan. They can also help you lock in an offer on a property with a seller. Either type of letter can increase your property options and help you get an edge in a competitive buyer’s market. 

After you obtain a mortgage commitment letter, you are one step closer to procuring the property you need for your family. It increases your bargaining power in a ruthless real estate market by eliminating purchasing competitors without disposable funds on hand.

Let Altitude Home Loans Assist You 

What is a mortgage commitment letter? Ultimately, it is a way for you to improve your purchasing options while getting an edge with sellers. At Altitude Home Loans, our experienced loan officers can help you procure adequate loans that help you cover transfer taxes and other property fees. 

Call 520-500-1010 for assistance in your home-buying journey today.

deed of reconveyance

Understanding Deed of Reconveyance: How It Works

The deed of reconveyance is one of those real estate terms many people don’t know, but it is still crucial for homeowners to understand.

Property owners use a deed of reconveyance to transfer property from a lender to a borrower after paying off their mortgages. If you’ve ever had a mortgage, then it’s essential to understand what a deed of reconveyance is. 

This article explains how a deed of reconveyance works and what you need to know about them. If you want to learn more about obtaining a home-purchasing loan in Tucson, call our team at Altitude Home Loans at 520-500-1010.

How Does a Deed of Reconveyance Work?

When you take out a mortgage, you borrow money from a lender. Once you’ve fully paid your mortgage loan, your lender will issue you a deed of reconveyance. This document confirms that your title now belongs to you, the borrower.

Having a deed of reconveyance is crucial if you want to sell your home in the future. Real estate agencies and prospective homeowners alike can do a title search on your property, looking for relevant legal documents. If you have a deed of reconveyance, they’ll know that your home is no longer at risk of foreclosure.

If you ever need a new mortgage, you’ll receive another deed of reconveyance confirming that you paid off your previous mortgage. It’s important to keep in mind that deeds of reconveyance vary from state to state. For example, some states prefer to use satisfaction of mortgage documents, but these are the same in all but name.

Parts of a Deed of Reconveyance

A standard deed of reconveyance includes the following:

  • The name of the lender
  • The name and address of the mortgage borrower
  • Property description and post office information
  • Proof that the borrower has paid their mortgage in full
  • Lines for signatures from all parties and a third-party notary

Any deed of reconveyance document missing one or all of these pieces is invalid. Ensure that your deed of reconveyance document follows relevant standards for your state. If you have any questions about your financial obligations, don’t hesitate to contact your local mortgage professionals.

What Happens with Incorrectly Filed Deeds of Reconveyance

Erroneous or non-existence deed of conveyance documents cause title issues. A homeowner who lacks a proper deed of conveyance will have a hard time selling their property. Check with your local county record’s office to ensure you have a proper deed of reconveyance on file.

What Is the Difference Between Conveyance and Reconveyance?

Conveyance refers to the transfer of property ownership from one party to another. Additionally, conveyance requires a deed that outlines the parties involved and the property in question. However, reconveyance refers to transferring a property title between a lender to a borrower.

Professional Mortgage Services in Tucson, AZ

If you need a deed of reconveyance for your Tucson home, look no further than Altitude Home Loans. Our team knows all about the mortgage process steps and can gladly help you along your mortgage journey. Contact us today to speak to one of our certified mortgage professionals in Tucson, Arizona, by calling 520-500-1010.

what are transfer taxes on a mortgage

What Are Transfer Taxes on a Mortgage? 

Buying a new home can be quite an exciting (and somewhat stressful) experience, especially when it comes to tax rates, fair market, and closing costs. You might wonder, “how do I afford a new home?”. To help answer questions like this when looking for a home purchasing loan in Tucson, read more about the process below.  

When you make the decision to start looking for a new home, you might be thinking to yourself, “what are transfer taxes on a mortgage?”. While the rules of transfer tax can change depending on your location, it’s important to be prepared by knowing what a transfer tax is and how it appears on a mortgage. 

In this blog post, we’ll discuss what transfer taxes are and how the team here at Altitude Home Loans can help you throughout the process. 

What are Transfer Taxes? 

Before we fully dive into answering the question of “what are transfer taxes on a mortgage?”, let’s go over mortgage and what it is.

A mortgage is a loan agreement between the buyer and a lender and it’s what gives you the capability as a new homeowner to purchase real property. Over time, you continue to make mortgage payments. If you fail to do so, the lender you made the agreement with can take the property back. This is why it’s important to keep up with your payments after buying a home. 

A transfer tax, not to be confused with property taxes, is a one-time payment enforced by the state or local jurisdiction when a transfer of real estate property occurs between the seller and a qualified buyer. To put it simply, it’s what happens when a property changes ownership. The transfer tax is equal to the percentage of the appraised value of the property you’re purchasing.

Depending on where you are located, the buyer and seller can negotiate who will pay the real estate transfer tax. While it may seem like an intimidating decision to make in theory, the customs surrounding the local real estate market will ultimately help make that decision. 

Turn to a Professional Lender to Explain Your Mortgage Responsibility

If you’re ready to purchase a home, start with us at Altitude Home Loans. Once you find your home loan officer, all you have to do is apply for your loan through our easy-to-follow online portal on our website. Your personal loan officer will reach out and guide you through the process. It’s as easy as that!

With our professional team of home loan officers, we can guide you in the right direction for mortgage payments and transfer taxes. 

Contact Altitude Home Loans in Tucson, AZ

If all this financial jargon is confusing you, you’re not alone. Many homebuyers struggle to understand the financial complexities of their first home purchase. To ease those concerns, you need a mortgage broker who is qualified to help. Our team here at Altitude Home Loans can help with answering questions like “what are transfer taxes on a mortgage?”.

Call us today at 520-500-1010 or contact us online to schedule an appointment with a home loan officer at Altitude Home Loans in Tucson, AZ.

difference between mip and pmi

Understanding the Difference Between MIP and PMI

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. 

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