Mortgage insurance allows consumers to
purchase a home with a small down payment. Some buyers don't 20% of the
value of the home they can otherwise afford. Most lenders require at
least 20% down in order to insure themselves against a future
foreclosure should the property lose value. They also know that
borrowers who have at least a 20% equity in their homes default less
often than borrowers with less equity.
Mortgage
insurance takes on the lenders risk for the loan amount above 80% of
the home value. Like all insurance PMI or MI has a cost that must be
paid by the borrower. The payment is included in your mortgage payment
if your loan requires PMI or MI so that the lender knows that it is
being paid on time.
You can cancel mortgage insurance without refinancing. In most cases,
when you have established a 20% equity in your home and you haven't
missed a payment in the past 12 months, you can get your mortgage
insurance requirement removed by the lender.
Call me today at (310) 453-4016 or email me at Bill@rate.com
Thursday, January 19, 2012
Mortgage Broker Bill Rayman Answers: What is PMI and do I need it?
About Me
In no particular order I enjoy owning unusual breeds of dogs and cats; love to travel to exotic locations where there are opportunities to learn about even more exotic animal and sea life or the culture of the locale; follow the movies, Knicks, Clippers, and the Yankees; and work way too hard supporting all those passions.
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