No Mortgage Insurance Required

Normally if you purchase a home with less than a 20 percent down payment you are required to purchase mortgage insurance. Normally your mortgage insurance premium is collected each month along with 1/12 of your property taxes and placed in an escrow account in your bank where they are held until such time as taxes and insurance must be paid.

Many people would rather not have to let the bank hold their property tax payments and they would rather not have to make a separate mortgage insurance payment.

Washington Mutual listened to their customers and came up with a No Mortgage Insurance loan. The loan is called Advantage 90®. With an Advantage 90 loan you are required to put up a down payment of just 10.1 percent and your down payment can come from any source. This means that potentially you do not need to have even one cent of your own money in the deal.

The way the no mortgage insurance Advantage 90 loan works is that your mortgage insurance payment is worked into the interest rate of the overall loan. This means that a no mortgage insurance Advantage 90 loan has a slightly higher interest rate than a conventional loan, but the advantage is that because your mortgage insurance is now part of your interest rate it is now tax deductible – something that is not true with a conventional loan.

Not only does the Advantage 90 loan offer your tax advantages, and a low down payment which may be 100 percent gifted to you, but as you pay down the principal of your loan, and as your property appreciates, the insurance portion of your interest rate will decline.

Because the Advantage 90 loan does not require you to make a separate mortgage insurance payment you should end up with more liquidated cash flow in your pocket each month plus additional tax savings at the end of the year. Another advantage to the Advantage 90 loan is that it is fully assumable if you sell your property.

With the Advantage 90 loan you may choose from a variety of Adjustable Rate mortgage options or you may choose a 15-year or 30-year fixed-rate loan.