In Episode 17 of the Intelligent Equity Podcast, host Ryan Kiefer talks with Rob Deters of MGIC Mortgage Insurance. Rob demystifies mortgage insurance by explaining how it can help first-time home buyers get into a house sooner. Learn about the different types of mortgage insurance that are available, how to remove the insurance and the difference between conventional and FHA loans.

Episode Highlights:

Rob was in the wholesale lending business for 15-20 years. He joined MGIC six years ago.
Mortgage insurance can actually be a great thing when you’re buying a house.
You do not have to put 20% down.
If you put down 10-15% instead, then you’ll have the extra to cover costs like replacing the carpet or buying new appliances.
Mortgage insurance is much cheaper than it was in the past.
There are different ways to pay for mortgage insurance.
Monthly is the most common way to pay for it.
When you pay monthly, nothing is due at signing which lowers closing costs.
There’s also the borrower paid single premium option.
If you’re going to be in your house for more than four years, the single premium option is worth considering.
There’s also lender-paid mortgage insurance which carries a higher interest rate and is more expensive than the other plans.
Rob describes how someone can cancel mortgage insurance and when it automatically falls off.
Not all lenders require you to have your insurance for two years.
FHA loans require a monthly payment and a one-time premium that’s rolled up into your mortgage.
With FHA, you cannot cancel the insurance.
You can put as little as 3% down. There’s also down payment assistance out there.
Mortgage insurance can help you get into a house sooner.
The money you put down is actually getting eaten up by inflation over time.
MGIC’s Ready Nest website provides free educational resources for first-time buyers.

3 Key Points:

Most buyers try to avoid PMI, but you don’t really need to put 20% down.
There are three different ways to pay for mortgage insurance.
The biggest difference between conventional and FHA loans is that you cannot cancel the insurance with an FHA loan.

Resources Mentioned:

Ryan Kiefer: LinkedIn, Facebook, Website
Rob Deters LinkedIn
MGIC: Mortgage Insurance
readynest.com