Frequently Asked Questions about PMI!
What is PMI?
Private Mortgage Insurance (PMI), is insurance that protects a lender or investor against loss from borrowers that stops making their mortgage payments. It allows a home buyer to put down as little as 3% instead of 20%.
Borrower may cancel PMI once certain conditions are met by the lender or investor. Typically, once your mortgage balance reaches less than 80% of the house value, you may cancel PMI.
Pros of PMI?
The advantages of Private Mortgage Insurance (PMI), it allows individuals to purchase a home sooner because they don't have to accumulate the typical 20% down payment.
Cons of PMI?
The disadvantages of Private Mortgage, it adds to the expense of your mortgage payments and house ownership in general.
If you're curious how lenders actually calculate PMI, you can visit Radian which is one of the several MI companies that lenders go to.
At EZ Funding Group, Inc. when we are searching for a lender for our customers, we also search the best MI company to use for that particular client as MI rates do vary from MI company to another and it's due to multiple factors like the Loan to Value or credit scores and so on.