Skip to content
Andrew Tobias
Andrew Tobias

Money and Other Subjects

  • Home
  • Books
  • Videos
  • Bio
  • Archives
  • Links
  • Me-Mail
Andrew Tobias
Andrew Tobias

Money and Other Subjects

Still Paying Mortgage Insurance?

January 31, 1997January 31, 2017

This was the headline in the Wall Street Journal, and it’s so simple and obvious it’s worth cribbing for those of you who missed it. (Something tells me a fair proportion of the people with mortgage insurance don’t read the Journal.)

As Andrea Gerlin explained (January 16), anyone who buys a home with less than 20% down typically is required to pay for private mortgage insurance. That covers the lender for any shortfall in case of default. Say the bank were owed $120,000 but the proceeds from the foreclosure were only $95,000. Mortgage insurance would pick up the $25,000 difference.

But once you’ve paid down enough of the loan, and/or the home has appreciated enough to give the bank a reasonable cushion, you are entitled to stop paying mortgage insurance (though you may have to pay for an appraisal and, even then, be persistent and determined with your bank).

So:

Are you or is anyone you love paying mortgage insurance? If you don’t know, ask your bank.

Might you be able to stop? If so, it’s just found money, with virtually no downside to you. (The downside would be that the bank might come after YOU for any losses after a foreclosure. But in many instances, that’s unlikely, and in states with “non-recourse” mortgages, it’s not even legal — California used to work that way, and still may.)

Shouldn’t the bank have to notify you of this after you’ve been paying for a few years, and the balance you owe has shrunk to less than 80% of the original appraised value? Yep. According to the Journal, that’s a reform that might be adopted. But in the meantime: check you mortgage.

 

Post navigation

← Motley Fool Dog Track – Revisited
Sell Your Losers →

Quote of the Day

"Airplanes are interesting toys but of no military value."

Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre.

Subscribe

 Advice

The Only Investment Guide You'll Ever Need

"So full of tips and angles that only a booby or a billionaire could not benefit." -- The New York Times

Help

MYM Emergency?

Too Much Junk?

Tax Questions?

Ask Less

Recent Posts

  • "The Most Popular Bill Ever Signed In The History Of Our Country"

    July 6, 2025
  • Unbelievably Bad -- Literally

    July 4, 2025
  • Repeal The Steal

    July 2, 2025
  • Our Record-High Stock Market

    June 30, 2025
  • Stuffing The Goose

    June 30, 2025
  • Yes! (Plus A Bonus)

    June 29, 2025
  • How Does THAT Make You Feel . . .

    June 27, 2025
  • Randi, David, Ken, and HYMC

    June 26, 2025
  • Six Links For Your Consideration

    June 25, 2025
  • Weekend Reading

    June 20, 2025
Andrew Tobias Books
  • Facebook
  • Twitter
©2025 Andrew Tobias - All Rights Reserved | Website: Whirled Pixels | Author Photo: Tony Adams