mortgage insurance,what is PMI,what is private Mortgage Insurance, Chantilly Highlands realtor
Tim: I purchased a home in Chantilly Highlands two years ago and I have something called PMI on my loan. What exactly is the function of PMI, Private Mortgage Insurance, and as a homeowner do I have to pay it forever?
Steve: If you purchased your home within the last 5 years and put less than 20% down, you probably had to acquire PMI when you purchased your home, even if you used and FHA mortgage. Private Mortgage Insurance protects your lender in the event that you default on your mortgage.
It enables lenders to offer lower interest rates and make loans to folks that might not otherwise be deemed to be good credit risks. You can see how necessary it has become due to the high default rate that has occurred over the last 3 years.
The good news is that once your home has appreciated to the point where you have more than 20% equity in it, you will be able to stop paying it most certain conditions. Check the article below for more detailed information on PMI and how to go about canceling it when the time comes.
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Cancel Your Private Mortgage Insurance
Private mortgage insurance is unavoidable for some homeowners, but don’t pay PMI premiums a day longer than required by your lender. Read
Visit houselogic.com for more articles like this.
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