What Is Private Mortgage Insurance (pmi)-verbal jint

Real-Estate If you have ever bought a home or are considering by a home, condo or townhouse, then you have probably heard the term Private Mortgage Insurance or PMI. PMI is an insurance product sold by some private insurance .panies. PMI protects a lender in case a homebuyer does not or cannot maintain payments on their home loan or mortgage. In other words, PMI protects lenders from loss if a buyer defaults on their loan. If you are getting a loan to purchase a home or other real estate, most lenders require that you put 20% of the purchase price as down payment. However, not all homebuyers have that amount of money available for a down payment. It is not un.mon for buyers to only put 15% down, or 10% down, or 5% down, or in some cases, no down payment is applied, and the lender provides 100% financing. To protect the lender’s interests in situations where the down payment is less the 20%, the lender will usually require a borrower to pay for PMI so that the lender is covered in case the borrower later defaults on the loan. The premium charged by insurance .panies for PMI is usually a percentage of the loan amount. The premium is normally rolled into the borrower’s mortgage payment. While PMI increases a borrower’s monthly payment, it does help them get a home loan that they may not otherwise be able to obtain. As an alternative to PMI, many lenders offer two loans to reach the amount of money needed by a borrower. For example, a borrower may obtain a first mortgage for 80% of the loan amount, and a second mortgage for 20% of the loan amount, which totals 100% financing. Homebuyers should remember that PMI protects only the lender and not the homebuyer. If a borrower does not maintain payments on a mortgage, the lender will mostly likely initiate foreclosure proceedings. Borrowers should know that some loan programs have strict credit and in.e eligibility criteria to qualify for the loan. You should also know that U.S. government has a program similar to PMI called Mortgage Insurance Premium (MIP). PMI is not related to homeowner’s insurance, which covers your property against specified damage or perils. Be sure to shop various lenders to identify the best loan program for your particular situation. About the Author: 相关的主题文章:

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