Like many others wanting to take advantage of pandemic-induced low interest rates, I refinanced my home in 2021. I remember holding my breath as my lender checked appraisals to make sure the value of my house was sufficiently superior to the loan I was looking for. that I could avoid paying the mortgage insurance. In my previous mortgage, I was paying for insurance because as a first-time homebuyer, I was unable to put down a sufficient down payment to increase the gap between the value of the home and that of the loan.
Each time I applied for a mortgage, my lender explained these policies to me and I relied on their expertise to help guide my home buying decision. I knew which houses I could afford to buy because the lender, trained in risk assessment and committed to protecting their own interests in the transaction, would not lend me more than the value of the investment I was making with the loan.