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Leona Said:

What is mortgage insurance?

We Answered:

It sounds like you’re talking about private mortgage insurance (PMI), but you might wondering about something completely different: mortgage protection life insurance. This is a type of term life insurance that covers you for a certain number of years, often the same number of years as are remaining the your mortgage. The death benefit coincides with the mortgage amount, so that the policy will pay off the balance of the mortgage should you die before the loan is paid off. If the mortgage balance is less than the death benefit, then the additional money will still be paid to the beneficiary. Typically, the policy has a guaranteed, or set, premium. A variation of mortgage protection life insurance is known as mortgage cancellation insurance. It also is a term life insurance policy payable upon the death of the borrower, however, instead of paying a set benefit, it covers the declining balance of a home loan.

Critics of these policies say you would be better off getting a term policy for the same amount. This would allow the beneficiaries more flexibility with the money after your death. Flexibility, however, is the very thing people are trying to eliminate with mortgage protection life insurance. Grieving family members do not always make the best investment decisions. And, unfortunately, disreputable financial advisors often try to take advantage of survivors. Mortgage protection life insurance guarantees that the insurance money will be used to protect your largest asset—your home. It guarantees that your family will have a roof over its head. It also is recession-proof. Many people think the family can always sell the home to retire debts or pay medical bills. As the housing slump is showing, this is not always the case. The market value of a home can drop below the loan balance, creating “negative equity” in the home. Mortgage protection life insurance solves this problem. It will retire the home loan, no matter what the home value is. The family will own the home, free and clear. They can sell it at a reduced price and still realize a huge profit. Finally, policies can be written to include a terminal illness rider, paying off the home in the event that the policyholder is terminally ill. Rather than losing the house because you are no longer working due to terminal illness, you will be able to pay it off while you are still alive.

Wallace Said:

Could I get a home loan with no job, if I put a 60% down payment, and have 3 years worth of payments saved up?

We Answered:

Limited-documentation and no-doc loans once were used primarily by self-employed professionals, small-business owners and individuals who are heavily dependent on periodic bonuses or commissions.

In limited- or no-documentation programs, applicants typically state their income and assets to the loan officer but aren’t required to show detailed proof of that information for the mortgage company’s files.

Generally, applicants are required to have good credit histories, but at the extreme — NINAs (no income verification, no asset verification) — they need not document much of anything when qualifying for a mortgage. The allure of such mortgages for lenders or brokers: They come with higher rates and compensation.

No Documentation Mortgage Loans
One type of No Doc Loan is the "NINA" loan, where no income or asset information is provided or verified. If you can verify liquid assets, I would suggest you apply for a Stated Income Verified Assets loan or a No Ratio Loan which offer better rates.

The NINA loan approval is based on down payment, credit history, and property value. This program still requires "employment" documentation of your past 2 years, while others do not. No Doc, "NINA" , loans may go to 100% loan to value or 10% down/equity depending on credit scores. The standard credit scores needed are above 660.

No Income No Asset Programs: (NINA)

(Homes, 2 to 4 Units*, Condo High Rises, Jumbo Loans)

95% to $1,00,000

90% to $1,300,000


No Income, No Asset, No Employment: ( No Doc ) These loans have No Verification of Employment, Income, or Assets Loans and are available on 6 mo adjustable, 2, 3, 5, & 7 year fixed ARM's. A 15 & 30 year fixed rate is also available. For No Doc 100% financing, you'll need credit scores above 680 although some programs go as low as 660.

95% up to $1,000,000

90% from $1,000,000 to $1,300,000

The above program requires a minimum of 5%-10% down or equity when job is not verified up to $1 mil outside of CA.

New 90% No Doc up to $1,000,000 SFR Primary Residence ( 720 credit score for 90%, 680+ for 90%)

New - 90% No Doc with Assets up to $750,000; Assets verified with no verification on you job or income.

Program Highlights

3 year, 5 year, 7 year & 10 year interest only payment option on 3, 5, 7, & 10 yr Fixed Adjustable Rate Mortgages. (credit scores over 660) ; 1 month adjustable & 1 yr fixed ARM/s now available too.

Talk with a broker, a broker underwrites for many company's so they only have to pull credit 1 time, and they (lenders) look at that credit report. . A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home &/or refinancing, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out