While financing for buyers with large down payments still seems to be sliding through the mortgage machine, first-time home buyers and other with less that 20% down are having to be even more diligent in their financing search.  Now that the second mortgage options seem to have virtually dried up, mortgage insurance is back into the picture.

In Tyler Osby’s “Make Your Lender Pay Your Mortgage Insurance!” post yesterday, he clearly shares what it is and why you want to learn about it.  His quote, “I used to tell customers that having mortgage insurance was like lighting your money on fire.”, cracks me up and at the same time aligns with my own perspective.

Since this lender pay option is was new concept to me, I did a little searching about the web to see what I could find. 

• Wells Fargo has a pro’s and con’s page that gives you a quick look-feel.
• In 2005, Jack Gutentag wrote “Lender-paid mortgage insurance a good deal for borrowers”.  Jack refers readers to a mortgage insurance calculator for buyers to compare the actual interest rates of buyer paid vs. lender paid mortgage insurance.  (I ran a couple examples of home buying scenarios, and in my case, the interest rate for the lender-paid option was slightly lower.  Couple that with the reduced monthly mortgage payment, and it seems like a winner to me.  Your results may vary.)
• Shailesh Ghimire, our local Arizona Mortgage Guru, wrote about the lender paid insurance option earlier this summer. 

It’s funny how information is presented to us, and we miss it.  Timing is everything. 

This week, I have a client who could really benefit from lender-paid mortgage insurance.  His lease is up very, very soon and is buying his first house.  As with most first-time buyers, money is tight, not much down payment, and yes, there are closing costs, too.   Looks like this little gem of timely info is going to save him some money and help him get into his first home.