What is Mortgage Insurance?
Commonly referred to as PMI, Private Mortgage Insurance, is an insurance policy which compensates the lender or investor if there is a loss due to a default on the loan.
With low down payment loans this helps to minimize the risk for the lender.
If your down payment is less than 20%, as a buyer, the cost of the insurance policy is passed on to you in your monthly payments. The cost is a percentage based on the loan amount and type of loan.
In many cases it is beneficial to purchase a home with a lower down payment. Depending on the type of the loan and the current value of a home the mortgage insurance can be removed.
For more information regarding mortgage insurance talk to a reputable lender. They can give you more information regarding the cost for the PMI with your particular loan.
For guidance or questions please contact us at 760-873-4161.
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