Mortgage Insurance is NOT a bad thing!!

Mortgage Tip:

I hear it all the time: “Stay away from mortgage insurance!” But what if I told you that mortgage insurance (which is required if you put less than 20% down) might actually make more financial sense than putting 20% down?

Here’s why. Mortgage insurance can often be surprisingly affordable—sometimes as low as $40–$80 per month depending on credit, loan size, and down payment amount. And in some cases, loans with mortgage insurance actually come with better rates than those without it.

Let’s say you have $100,000 set aside for your home purchase. Instead of putting all of it toward a 20% down payment, you could put 10% down, keep $50,000 in reserves, and use that extra money to:

• Pay off $25,000 in high-interest credit cards, instantly improving monthly cash flow

• Set aside an emergency fund or home maintenance cushion

• Keep some flexibility for furniture, renovations, or moving costs

That same $25,000 payoff might save you $500–$700 per month in interest on credit cards, while the added mortgage insurance might only cost $60–$80 per month temporarily. You can remove MI later—either automatically when your loan reaches 78% loan-to-value, or sooner with a refinance or updated appraisal.

In many cases, you could come out thousands ahead by keeping more of your cash working for you instead of locking it into the home right away.

This is exactly why having a true mortgage professional—someone who acts as a planner, not an order taker—is so important. A good loan officer should help you evaluate every option, not just quote a rate.

If you ever want to see how this plays out with your own numbers, I’m happy to run side-by-side scenarios showing what’s best for your goals.