Many people in Florida may dream of owning a home of their own, but they may worry that they cannot make their dreams a reality because they do not have the funds available for a 20 percent down payment. For many people, it would take decades to save up the money needed to buy a home. However, a full 20 percent deposit is not actually necessary to make a home purchase a reality. The average down payment is around 10 percent, and many people buy a home with far less down. Mortgage insurance is an important and popular product that can put homeownership in reach for many.
Because of the availability of mortgage insurance, people can enter the residential real estate market without the vast sums necessary for a 20 percent deposit. This type of insurance provides coverage to mortgage lenders as well as institutions like Fannie Mae and Freddie Mac to address the potential higher risk of lending to people with lower down payments. Because mortgage insurance provides safeguards to the lenders, companies are willing to provide mortgages to borrowers with far smaller down payments available.
Mortgage insurance companies have been drawing attention to the role of their business in promoting homeownership. In the closing days of the Obama administration, the Federal Housing Administration announced that it would reduce its own mortgage insurance premiums. The federal program competes with private mortgage lenders to provide mortgage insurance to borrowers. Even though the FHA reductions may not proceed, private mortgage insurers have lowered their premiums.
New buyers may have many things to learn about the process of purchasing a house. From dealing with home inspections to title searchers, there is a lot to learn about a property before making a major investment. A real estate attorney may help ensure that a sound purchase is made, from the original contract to closing.