mortgage insurance? when is it used?

[LindaLu]

I have an fha loan and of course was told I had to have mortgage insurance...when is it ever utilized?  I got behind on the loan ...they are trying to renegotiate the loan or modify it as they say to put me back on track but does the mortgage insurance do anything in cases like this or is it just for the benefit of the lender?

[Anonymous]

One of our mortgage experts will be around shortly to answer that in depth, but the SHORT answer is that you have to have mortgage insurance on some loans until you have paid enough to have a certain percentage of equity in the property. I believe the required percentage is 10%, but I'm not sure.

So if it is 10%, and you have a mortgage for $250,000, you would have to keep the mortgage insurance until you had paid $25,000 toward the principal.

This is why I strongly recommend paying a little extra--even if only $50--on your mortgage each month--you build equity faster and save an amazing amount on interest.

[DallasLoanGuy]

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LindaLu wrote:

I have an fha loan and of course was told I had to have mortgage insurance...when is it ever utilized?  I got behind on the loan ...they are trying to renegotiate the loan or modify it as they say to put me back on track but does the mortgage insurance do anything in cases like this or is it just for the benefit of the lender?

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FHA can use the insurance to get you back on track.... the lender will do a workout plan.

Basically, if you are good people that had something bad happen to them, and you are over it and are trying to get back on track..... you have a shot.

If you have leather couches and lexus in the driveway, your shot is lessened.

your lender's loss mitigation/workout dept will explain

[LindaLu]

thanks dallas!!!!

what if I also filed bankruptcy and included the mortgage?   I plan on keeping the house but had to get back on track after bankruptcy and am ok now but I hope the lender doesn't hold that against me as I haVE

[LindaLu]

continued...as I have made it clear to them I want to keep my home and start paying on a regular basis...I have no leather couches((mine is falling apart..lol!!!) and no lexus...!!!not even close!!

[DallasLoanGuy]

explain to them that you are trying.... work out your own budget.... let them know what you CAN do.

prove to them that once caught up, you can pay ontime.

i am not the expert on this.

maybe someone with more experience will come along and chime in.