Why mortgage insurance makes sense
Private mortgage insurance enables members to gain access to the housing market more quickly, by allowing down payments of less than 20%, and it protects Credit Unions against loss if a member defaults.
For the member, private mortgage insurance can provide:
- Access to the housing market more quickly, by reducing the required down payment
- Tax deductible premiums for eligible members
- Range of payment options
- Cancellation of Member-Paid MI (unlike FHA insurance)
For the Credit Union, private mortgage insurance can provide:
- Broader range of loan products
- Expanded pool of buyers with lower cash requirements
- Wide range of insurance products
- Faster, easier closes
- Reduced exposure
The ability to originate loans for members with less than a 20% down payment is critical to serving first time homebuyers and expanding the opportunity of homeownership.
With affordable home prices and low interest rates, this is a great time for buyers to enter the market. Private mortgage insurance allows buyers to purchase homes sooner while providing safer loans for lenders.