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Originally Posted by you&me
Maybe I'm misunderstanding this, so maybe someone can help me out - why are the qualifying standards for uninsured mortgages stricter than insured?
To me, it seems that if someone is able to come up with >20% down, they're a more stable candidate than someone that scrapes together ~5%?
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My understanding was always that the lender takes a greater risk with the insured. They provide insurance and typically provide lower interest rates. Therefore, they need to know that the borrower is more likely to be able to pay.
I could be off on this though. Not my area of expertise.