Down Payments and Private Mortgage Insurance
Some lenders require 20 percent of the home's purchase price as a down
payment. However, many lenders now offer loans that require less than 20
percent down-sometimes as little as 5 percent on conventional loans. If a
20 percent down payment is not made, lenders usually require the
home buyer to purchase private mortgage insurance (PMI) to protectthe lender in case the home buyer fails to pay. When government-assisted
programs such as FHA (Federal Housing Administration), VA (Veterans
Administration), or Rural Development Services are available, the down
payment requirements may be substantially smaller.
• Ask about the lender's requirements for a down payment,including what you need to do to
verify that funds for your down payment are available.
• Ask your lender about specialprograms it may offer.If PMI is required for your loan,
• Ask what the total cost of theinsurance will be.
• Ask how much your monthlypayment will be when including the
PMI premium.
• Ask how long you will be required tocarry PMI.
BETTY GARCIA
786 229 3636
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