Common Question What is PMI?

By
Real Estate Broker/Owner with Frank Rubi Real Estate, LLC La Broker 09995688826
https://activerain.com/droplet/gbw

Common Question from Buyers: What is PMI? Working with buyers who are new to the day to day working of real estate I find one of the most common asked questions is “How much do I need to come up with for a down payment?” I go through the steps and explain the list of how the down payment really breaks down. One item on the list is PMI.

What is PMI?

PMI or Private Mortgage Insurance is insurance that lenders require when you’re putting less than 20% down payment for your purchase. PMI protects the bank against loss due to default on a loan.

Can you cancel your PMI?

Yes PMI can be cancelled. Now days banks are require to inform you when your loan has reach the 79% of the original loan value. Here are 4 things to keep in mind about cancelling your PMI:

1. Pay Down of the original loan value must be equal to 80%

2. Your loan payments must be current

3. Some banks are requiring evidence of property value. This can be accomplished by hiring a Certified Real Estate Appraiser.

4. Some bank may require that your loan be in place for a certain amount of time.

Need some advice when buying your home feel free to text, call or email and I will try to help you.

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Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Thanks for a nice, simple explanation for buyers about PMI.

Jul 18, 2011 06:37 PM #1
Rainmaker
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Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate

Hi Frank,  very good explanation and thanks for sharing.

Jul 18, 2011 06:56 PM #2
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John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Frank in the good days it was easy to get rid of PMI.  Not so much the case these days is it?

Jul 19, 2011 03:12 AM #3
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Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

That is a good question - what is PMI?  It is very hard to obtain where I live (one of the highest distressed housing markets in the nation!)

Jul 21, 2011 10:22 AM #4
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