mortgage insurance in Carrboro, NC

What are the different types of mortgage insurance Carrboro?

In Carrboro, North Carolina, there are several different types of mortgage insurance to consider. Private mortgage insurance (PMI) is typically required by lenders for those who put down less than a 20% downpayment on their homes. This type of insurance protects the lender against the risk of the borrower defaulting on the loan. Imputed mortgage insurance (IMI) is applied to mortgage interest payments by the lender when a borrower's home loan balance exceeds what they are able to pay each month.

How can I reduce my Carrboro mortgage insurance policy cost with a larger down payment?

One way to reduce your mortgage insurance cost with a larger down payment in Carrboro, NC is to take advantage of the down payment assistance program offered through the town. The program, which is open to all first time home buyers who meet the eligibility criteria, provides an up to $10,000 grant to cover a portion of a down payment. This grant can be used to offset the cost of the mortgage insurance, thus lowering the overall amount a home buyer needs to owed.

What are the drawbacks of a private mortgage insurance policy Carrboro?

Private Mortgage Insurance (PMI) can be a disadvantageous decision for those living in the Carrboro, NC area. PMI requires an additional payment each month on top of the mortgage and could push payments beyond the financially comfortable level. This could impact the ability to afford other essential living expenses, such as food, health care, child care, or utilities. Furthermore, PMI is not tax deductible, meaning that it can appear as an added expense that never comes back into the homeowner's pocket.

Who is eligible for FHA mortgage insurance near Carrboro?

In Carrboro, NC, anyone who meets the qualifications of the Federal Housing Administration is eligible for FHA mortgage insurance. The qualifications include having a valid Social Security number, being a legal resident of the United States, and having a steady employment history or reliable income sources. Additionally, the FHA prefers applicants who have credit scores of 580 or higher, but the credit score requirement can be as low as 500 in some cases. Borrowers, who are also required to meet other standard loan qualifications, must have a debt-to-income ratio of no more than 43 percent.

Who is eligible for USDA insurance from Carrboro mortgage insurance companies?

To be eligible for USDA mortgage insurance in Carrboro, NC, you must meet certain income eligibility requirements, have a credit score of at least 640, and purchase a property located in an eligible rural area. Additionally, your total household income must be below the USDA's predetermined limit for your area, as determined by the median income for Carrboro. Furthermore, you cannot have received a USDA mortgage guarantee or direct loan in the last three years. Finally, you must be a United States citizen, non-citizen national, or Qualified Alien in order to be eligible for USDA mortgage insurance.

What are the drawbacks of a VA loan in mortgage insurance policies near Carrboro?

One potential drawback of a VA loan in the Carrboro, NC area is that the borrower must pay an upfront funding fee when they close on the loan. Depending on factors such as their status as an active-duty servicemember or a veteran, the percentage of the loan amount paid can range from .5 to 3.6 percent of the loan's value. Additionally, if the borrower wishes to access a cash-out refinance of the loan, the maximum loan-to-value (LTV) ratio they can receive is 90%.

How much is mortgage insurance in Carrboro?

The cost of mortgage insurance in Carrboro, NC will depend on the lender and their terms. However, when taking out a mortgage, you can typically expect to pay an annual premium ranging from 0.3% to 1.5% of the loan amount. For example, on a loan of $200,000, between $600 and $3,000 would be payable to the lender. Your lender will provide the exact breakdown of the mortgage insurance and can provide you with more information about the policy.

Can I cancel my Carrboro mortgage insurance policy early?

Yes, you can cancel your mortgage insurance early in Carrboro, NC. However, it is important to first contact your mortgage service provider to learn about the guidelines and fees associated with cancelling your mortgage insurance. The North Carolina Commissioner of Banks Office requires that lenders provide "specified disclosure language" within thirty days of application, as well as during the renewal process, if the mortgager chooses to renew their coverage at the end of the policy term. It is also beneficial to research other mortgage assistance options in order to make sure that you are making the most informed decision possible.

Can my Carrboro mortgage insurance company help me calculate my mortgage insurance cost?

Yes, lenders in Carrboro, NC can help you calculate your mortgage insurance. Experienced lenders can assist you by providing an estimate of your current mortgage insurance premiums and give you an idea of your overall mortgage insurance costs. Your lender will also know how recent changes in the market may affect your mortgage insurance premiums, and provide you with guidance on how to reduce those costs and be better positioned to make decisions about your mortgage insurance. Ultimately, working with a qualified lender in Carrboro, NC will provide you the most accurate and up-to-date information as you make decisions about your mortgage insurance.

Are there alternatives to mortgage insurance companies in Carrboro?

Yes, in Carrboro, NC, homeowners have the option of paying a one-time premium for lender-paid mortgage insurance (LPMI). This form of mortgage insurance is typically incorporated into the interest rate, meaning that the borrower only pays for the policy once, but pays a slightly higher rate than non-LPMI loans throughout the entirety of the loan. Additionally, depending on their credit score, borrowers may also be able to qualify for a lender’s joint mortgage insurance (JMI).