The power of mortgage insurance — and which state’s buyers use it most

Aly J. Yale
The Mortgage Reports contributor

Mortgage insurance makes its mark

Mortgage insurance often gets a bad rap. But according to new data, it actually helped more than 1 million Americans either purchase a home or refinance their mortgage loan last year.

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30 million mortgages and counting

According to new data from U.S. Mortgage Insurers, more than 1 million American used mortgage insurance to either purchase or refinance a house in 2018. Over the last six decades, mortgage insurance has helped more than 30 million U.S. consumers.

A large portion of those were first-time homebuyers, who account for almost 60 percent of all insured mortgage originations. Another 40 percent have household incomes under $75,000.

PMI mistakes to avoid: How to pay less for mortgage insurance

A big benefit of insured loans is that they offer homebuyers reduced down payment requirements — sometimes as low as 3 percent.

As the report explains, “By helping borrowers qualify for a mortgage with a down payment as low as three percent, MI has given nearly 30 million families nationally the opportunity to purchase a home sooner over the last 60 years.”

Before you make a 20% down payment, read this

Insured in the Lone Star State

As of Q3 2018, mortgage insurance covered almost $970 billion in outstanding housing debt across the country. Texas clocks in as the state with the most insured homeowners, with more than 89,000 having an insured mortgage loan.

Flroida took second with 77,000 insured homeowners, while California  (71K), Illinois (48K) and Ohio (43K) rounded out the top five.

Residents of Alaska, Vermont and Wyoming make the least use of mortgage insurance. In Alaska, only 1,780 homeowners have an insured loan, while in Vermont, only 1,830 do.

Get today’s mortgage rates

Are you thinking of buying a home? Mortgage insurance can help you do it without too much in up-front costs. Want to save even more? Shop around for your mortgage rate today.

Verify your new rate (Jul 7th, 2020)