Home ownership is a goal that many of us strive to realize. Unfortunately, building the necessary savings to afford the initial home lenders mortgage can be very difficult. One solution is to get Private Mortgage Insurance, or PMI, to help you afford to own a home sooner rather than later.
Here are some important things to know about PMI in a home lenders mortgage.
1. You still need some down payment: Normally, you need to make a down payment of at least 20% to get a home loan. Using PMI to get a home lenders mortgage can let you reduce your down payment to 10% or even 5% of your new home’s value.
2. For the lender’s benefit: It’s easy to misunderstand the nature of PMI. It serves to mitigate the lender’s risk, so that if you default on your mortgage, the PMI firm will pay the lender. While you have to pay for the PMI, the lender is the beneficiary.
3. Not permanent: One bright side to using PMI to help finance your home lenders mortgage is that once you’ve built up 20% equity in your home, you can have your lender cancel the PMI. After that, you’ll only have the mortgage payment itself.
Consult Midland Mortgage Corp when looking for your next home lenders mortgage. Our agents will help you to find the best mortgage solution for your unique needs.
Call 803.765.1680 and toll–free at 800.854.9484.