Insurance Against Rising Mortgage Payments
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
Insurance Against Rising Mortgage Payments
Overview
Homeowners worried about rising payments on interest-only and adjustable-rate mortgages have a potential solution. A new insurance product can help reduce financial stress.
Background
Interest-only loans and adjustable-rate mortgages gained popularity when interest rates were below 5%, allowing for lower monthly payments even with little or no down payment. However, as introductory rates rise and interest-only periods end, many homeowners are experiencing increased payments.
Current Situation
This trend is linked to a surge in foreclosures, which jumped 45% in January according to RealtyTrac. Bill Ruh, Government Affairs Director of the Citrus Valley Association of Realtors in California, warns of a looming crisis, with one trillion dollars in mortgages expected to reset to higher rates next year. Ruh suggests that the stable, 30-year fixed mortgage is a secure and attainable alternative.
Solution
New private mortgage insurance (MI) options provide a secure way to maintain lower monthly payments compared to many combo loans. One such option, "single premium" mortgage insurance, allows borrowers to finance the entire loan amount with no added monthly fees, as the premium is paid upfront. If the home's value appreciates sufficiently, the insurance can be canceled within the first few years, sometimes as soon as two to three years, with a partial refund.
Cost Comparison
For a $175,000 home with a 5% down payment, a single premium loan results in a monthly payment of $1,076, compared to $1,142 for a piggyback mortgage. If the insurance is canceled after three years, borrowers can receive a $1,630 refund.
Kevin Schneider of Genworth Financial, Inc. highlights the advantage of single premium products, stating, "They offer some of the lowest monthly payments, giving homeowners peace of mind knowing their payments will remain stable."
By exploring these options, homeowners can potentially secure more predictable and manageable mortgage payments.
You can find the original non-AI version of this article here: Insurance Against Rising Mortgage Payments.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.