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Summary: First-time home buyers in Washington tend to have a lot of questions about mortgage insurance. In this article, we’ll answer some of the more pressing inquiries, including whether first-time buyers in Washington need to pay mortgage insurance.
Do all first-time buyers have to pay for mortgage insurance? What kinds of mortgage loans require it? And how much do these policies cost? Here are answers to these and other frequently asked questions.
You won’t “trigger” a mortgage insurance requirement just because you’re a first-time home buyer. It has more to do with the size of your loan, in relation to the home’s value.
Washington mortgage rates insurance is usually required whenever the loan-to-value (LTV) ratio rises above 80%. This means that if you take out a single mortgage loan to buy a house, and make a down payment below 20%, you’ll probably be required to pay for mortgage insurance. This is true whether you are a first-time or repeat home buyer. It’s just an industry requirement.
It’s also important to realize that there are different kinds of mortgage insurance, just like there are different types of home loans available to borrowers in Washington.
A key difference here is that private mortgage insurance typically can be canceled when the homeowner reaches a certain equity level. But with an FHA loan, most borrowers have to pay the annual mortgage insurance premium for the life of the loan. So that’s an important consideration for Washington first-time buyers who have to pay mortgage insurance on their loans.
There’s an upside to all of this. PMI (and the FHA equivalent) allow home buyers to purchase a house sooner and with less money down. The downside, of course, is that it increases the size of your monthly payments. But for many first-time home buyers in Washington, the benefits of having a smaller down payment far outweigh the costs of mortgage insurance.
If you have questions about our mortgage programs for first time home buyers, we’d love to help. Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington, and we offer mortgage programs to borrowers in the entire state, as well as Oregon, Colorado, and Idaho. Please contact us if you have mortgage-related questions.
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