What is PMI?
If your down payment is less than 20 percent of the appraised value or sale price, typically your lender will require private mortgage insurance (PMI). A mortgage insurance policy protects the lender in case you default on the payments. As a borrower, you pay the premiums, and the lender is the beneficiary. There are options to avoid paying PMI if you are putting less than 20% down.
For some, there are advantages to NOT paying PMI. We will explain the pros and cons of this option. We work with several banks that do not charge customers who are putting down less than 5% down Private Mortgage Insurance, because the additional risk of the mortgage loan is covered by the interest compensation in your mortgage.
We’ll take a careful look at your financial and employment situation to determine what makes the most sense for you and your family.