PMI stands for private mortgage insurance. It allows borrowers to gain access to the housing market more quickly, by allowing down payments of less than 20%. It also protects lenders against loss if a borrower defaults on their mortgage.
For the Borrower, private mortgage insurance can provide:
Access to the housing market more quickly because the required down payment is reduced. Cancellation of Borrower-Paid MI (unlike FHA insurance) and a broad range of payment options.
For the Lender, private mortgage insurance can provide:
A broader range of loan products, wide range of insurance products, faster & easier closings, reduced exposure and an expanded pool of buyers with lower cash requirements.
Once you have the loan established and have thoroughly went through the guidelines of your mortgage; you can ask to cancel the coverage once your mortgage is less than 80 percent of the home's value or purchase price.
PMI is a topic that should be studied extensively when obtaining your first mortgage versus an FHA loan. Talk to your mortgage lender and banker about your options. In the meantime, happy house hunting!
Author:Tisa Peek Phone: 701-214-1188 Dated: November 1st 2018 Views: 99 About Tisa: Tisa has been in sales for sometime and comes to you with a passion for helping the client! She is o...
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