What is private mortgage insurance (PMI) and how does it benefit me?
PMI or Private Mortgage Insurance is provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults. It can make a big difference in how quickly your mortgage loan is approved and how much money you spend on a down payment. It is required if the loan amount is more than 80% of the home’s value.
This insurance benefits lenders and investor, but it also helps homebuyers too. Because Mortgage Center is protected by mortgage insurance, we can offer loans with low down payments. Without mortgage insurance, we would need to require a down payment of at least 20% of the loan amount. We understand that even if you have enough money for a large down payment, you may prefer to use it for other purposes. And if you don’t have a 20% down payment, it can take a long time to save it. While you’re saving, the price of your dream home is likely to rise – perhaps faster than you can save! Private Mortgage Insurance can be a big help if you’re like most borrowers in this type of situation. Contact a loan expert for more information at 800-353-4449.
- Will my fixed rate mortgage payment fluctuate throughout the life of the loan?
- How will my taxes be paid?
- What is an escrow account? Why do I need one?
- How long will it take to close my loan?
- Do I need an appraisal and an inspection?