What is PMI?
Private Mortgage Insurance: a type of insurance in the US that is paid by someone borrowing money to buy a house.
Not every home buyer with a mortgage gets charged for PMI. However, if you are paying less then 20% down using a Conventional Loan, most likely you are paying PMI. This additional insurance can end up costing hundreds of dollars a month, depending on the amount of the loan you have received. Some Conventional loans do not require it, however these usually mean you are paying other fees or a higher interest rate so mortgage companies have insurance to back the loan. Government back loans such as FHA and VA loans do not have PMI but do follow other rules which we will not go into in this article.
The biggest question is: How do you get rid of PMI so you can start saving that extra cash? Here are some steps to help.and for more detailed information, click HERE!
Pay down your mortgage for automatic or final termination of PMI
You can get “automatic” or “final” PMI termination at specific home equity
milestones.
2. Request PMI cancellation when mortgage balance reaches 80 percent
3. Refinance to get rid of PMI
4. Reappraise your home if it has gained value
For more in depth information about these steps click HERE! Make sure to contact your mortgage broker to see if and how you can start saving!
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