New Tools from HSH.com Help Homebuyers Effectively Allocate Cash, Understand Mortgage Insurance

HSH.com releases a unique calculator to help homebuyers decide how to best distribute their cash among down payment and closing costs, showing how these choices affect their loan and mortgage insurance costs. Accompanying the new calculator is HSH.com’s authoritative guide to Private Mortgage Insurance.

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Many homebuyers, especially first-time homebuyers, scrimp and save to get enough funds put together a down payment for a home with the impression that more is always better, and the reality is that a larger down payment may not be necessary.

Foster City, Calif. (PRWEB) May 08, 2014

HSH.com releases a new tool to help homebuyers more effectively allocate their precious funds toward the down payment for a home, showing the changes in mortgage insurance cost that larger and smaller down payments have, how much that mortgage insurance will cost them over time, and how soon buyers can stop paying MI. Mortgage borrowers may not know that the size of their down payment has a direct impact on their monthly mortgage insurance payments.

"Many homebuyers, especially first-time homebuyers, scrimp and save to get enough funds put together a down payment for a home with the impression that more is always better. Striving for a down payment of a given size may be stressful, and the reality is that a larger down payment may not be necessary," explains Keith Gumbinger, vice president at HSH.com.

The calculator reveals and compares the costs of mortgage insurance using the borrower's present down payment, and shows the changes in MI and loan costs when a smaller or larger down payment is employed. In doing so, it reveals to the borrower three key items:

1.    Exactly how much more down payment is needed to get into a lower cost MI bracket

2.    Exactly how much more the MI cost would be if a smaller down payment moved a borrower into a higher-cost MI bracket

3.    The exact amount of cash borrowers can hold back from their down payment while keeping the MI cost the same. With this information, borrowers can allocate those funds toward closing costs or perhaps lowering the interest rate on their loan.

Knowing these figures allows the borrower to make a sensible choice in the allocation of savings and shows the effects of these "asset allocation" choices, both today and until the MI policy comes to an automatic cancellation point.

“The Down Payment Decisioner Calculator allows you to see these choices and costs without needing to do a lot of complicated math or call a mortgage lender to run the figures for you,” says Gumbinger. “Most borrowers probably don't know that there may be a sweet spot for their situation where they not only have plenty of funds for a down payment, but also can repurpose some of that cash to cover costs or even pay a point to lower the interest rate on their loan."    

As a complement to the new Down Payment Decisioner Calculator, HSH.com also released "Everything you need to know about Private Mortgage Insurance," an authoritative guide to mortgage insurance. The seven-part guide covers everything from "Who needs mortgage insurance?" to “how can I avoid mortgage insurance?.”

About HSH.com
HSH.com is a trusted source of mortgage data, trends, news and analysis. Since 1979, HSH’s market research and commentary has helped homeowners, buyers and sellers make smart financial choices and save money on mortgage and home equity products. HSH.com, of Riverdale, N.J., is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit QuinStreet.com.


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