Should I consider a loan with private mortgage insurance (PMI)?
Private Mortgage Insurance (PMI) makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. The PMI insurance premium is based on the loan-to-value ratio and other factors such as credit score and is included in your monthly payment.
Federal regulations require that PMI be automatically cancelled when your loan balance reaches 78% of the original property value at the time the loan was secured. On conventional conforming financing, you may request that PMI be removed sooner, based on an increase in the property value as determined by a new appraisal to be ordered by the servicer.
Considering putting less than 20% down: if you prefer to hold onto some down payment funds for remodeling, PMI can be an easy solution to putting less money down, depending on some factors like credit score and equity, it can be relatively affordable.
- What is an ARM?
- Can I apply before I find a property and get pre-approved?
- What is the minimum down payment required on a purchase mortgage?
- What is the maximum percentage of my home’s value that I can borrow on a refinance loan?
- What is the maximum debt-to-income ratio allowed?
- Is paying off an existing second mortgage or home equity line considered cash out?
- Can I keep my existing second mortgage or home equity line and refinance my first mortgage?
- Can Empire of America finance the purchase of a property through a short sale?
- Am I able to refinance a property that was recently listed for sale?
- What is the difference between a conforming loan, a super conforming loan and a jumbo loan?
- Do you have any programs that don’t require income documentation?
- What is a subordination agreement?
- What is a three-day right to cancel?
- What is title insurance and why do I need it?
- What is prepaid interest?
- What is the difference between an Interest Rate and an APR?
- What should I do if I’m not sure about the annual real estate taxes?
- What steps should I take if I become a victim of identity theft?
- How can I obtain a free credit report?
- What is your minimum credit score requirement?
- What supporting documentation is required?
- How quickly can you close my loan?
- What is your rate lock policy?
- Are any fees collected when I lock?
- What if rates drop after I’ve locked?
- What happens if the loan process takes longer than my lock period?
- Can I choose a different program or rate after I’ve locked?
- Can I relock my rate if I cancel and reapply?
- If rates fall after I’ve locked, will you lower my rate?
- Should I lock or float my rate?
- What is an escrow/impound account?
- What are included in your closing costs? What are pre-paids & are they different from closing costs?
- Why do you charge a Lender Fee?
- Should I pay discount points?
- What is a rebate/credit?
- Can I prepay the loan without a penalty?
- How can you offer such low rates?
- Is there a fee or any obligation if I apply?