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PMI Insurance FAQ's
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What is private mortgage insurance? Private mortgage insurance (PMI) is insurance that protects a lender or investor against loss if a borrower stops making mortgage payments. It makes it possible for you to buy a house with as little as a 3-to-5 percent down payment, helping you buy a home sooner than you otherwise could.
Why is PMI needed? Studies show that homeowners with less than 20 percent invested in a home are more likely to default, making low down payment mortgages more risky for lenders and investors.
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How much does PMI cost? Premium prices vary. They are based on the size of the down payment, type of mortgage and amount of insurance coverage. Premiums typically are folded into your monthly mortgage payment. The range for a median priced home is $50 to $80 per month (in 2001, the national median price for a single family home was $147,500). You can pay the premium up front and finance it as part of your mortgage. Lender-paid policies also are available, but they result in a higher interest rate on the mortgage.
How do I qualify for an insured mortgage? The qualifying process for loans covered by mortgage insurance is the same as that for regular mortgage loans. Generally, you need to have enough income to cover the monthly mortgage payment and closing costs, and a good credit background. Many mortgage insurance programs offer flexible underwriting features, such as alternative methods of credit verification.
Can I get a loan with PMI if I have a low income ? Yes. If you're a lower-income, first-time buyer, you may be eligible for special programs that make it possible for you to buy a home with 3 percent or less down.
Can I buy PMI directly from an insurance company? No. The lender arranges for private mortgage insurance coverage on your loan. A range of PMI products with a variety of payment options is available to meet your needs. When you shop for a loan, ask lenders about your PMI options.
Can I cancel PMI? Yes. PMI usually can be cancelled when the homeowner builds up enough equity in the home. Under federal law, PMI on most loans made on or after July 29, 1999 , will end automatically once the mortgage is paid down to 78 percent of the original value of the house.
Do I get a refund when my insurance is cancelled? It depends on the type of premium plan you have. Most borrowers opt for the pay-as- you-go plan. With this plan, you pay for PMI a month at a time. When insurance is cancelled you stop paying premiums, but you don't get a refund. With plans in which you pay your premium up front, at closing, or annually, you may get a refund
What is a piggyback loan? Some lenders offer low down payment loan products that don't carry mortgage insurance. The most typical is the piggyback loan, also known as the 80/10/10. The piggyback stacks a high-rate small second mortgage on top of a lower-rate first mortgage. For most consumers, the piggyback can have several drawbacks, including higher monthly mortgage costs, a balloon payment and loss of financial flexibility.
What's the difference between PMI and FHA insurance? Private mortgage insurance is the private sector alternative to the Federal Housing Administration mortgage insurance, which is a government program backed by taxpayers. There are some important differences:
• PMI generally costs less. It covers the top 20 to 30 percent of the loan, while FHA insures 100 percent of the loan.
• PMI is available on a wider variety of loan products, and there's no maximum loan amount. FHA loans are subject to maximum loan
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...you'll receive targeted daily reports pertaining to the important topics that relate to mortgage loans, and helps to put you on the right path to mortgage success. Get the Information you need on PMI Insurance and how it affects Your mortgage before you buy, build, or talk to a lender.
Quality information is hard to come by these days, let alone expert advice on real estate & mortgage process and PMI Insurance that can effect your every day lifestyle. The advice in these newsletters is local, its professional, and its usable.
Why you should sign up and get the information you need right in your inbox today!
Whether you are looking into mortgage and PMI Insurance options, starting to develop your financial plan, or just looking for mortgage and PMI insurance information or how to avoid PMI this newsletter will give you the information you need to have before consulting with a lending professional. With your newsletter you will begin to learn about the following topics that affect your PMI Insurance and much much more:
- Credit Score and its affects on your mortgage
- The Homeowners Protection Act and borrower cancellation of PMI on home mortgages.
- How to use PMI Insurance to your advantage
- FHA Loans as a viable alternative to conventional loans with PM.
Dont forget....You'll not only get this initial guide to pmi, you'll also get our monthly newsletter that targets your needs and interests, giving you advice and strategy on how to manage your financial condition, grow your personal wealth, and put you on the path to total financial independence. Expert advice from local experts for you the central Ohio consumer- oh, and its FREE.
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***Please note all information we collect at RightWay is held in strict confidence. We do not sell or share our customer list with any other entities under any circumstances.
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Quality free mortgage and PMI information is hard to come by these days, let alone expert advice on financial topics that can effect your every day lifestyle. The advice in these newsletters is local, its professional, and its usable.
You will NOT find this quality of free PMI and Mortgage information from professionals anywhere else. Professional level advice brought to you FREE as an effort from our network of central Ohio professionals.
MORE FOR YOU!
Expert advice from Local experts.
Dont forget....You'll not only get this initial guide to pmi, you'll also get our monthly newsletter that targets your needs and interests, giving you advice and strategy on how to manage your financial condition, grow your personal wealth, and put you on the path to total financial independence. Expert advice from local experts for you the central Ohio consumer- oh, and its FREE. ...you'll receive targeted daily reports pertaining to the important topics that relate to mortgage loans, and helps to put you on the right path to mortgage success. Get the Information you need on PMI Insurance and how it affects Your mortgage before you buy, build, or talk to a lender. Quality information is hard to come by these days, let alone expert advice on real estate & mortgage process and PMI Insurance that can effect your every day lifestyle. The advice in these newsletters is local, its professional, and its usable. Why you should sign up and get the information you need right in your inbox today! Whether you are looking into mortgage and PMI Insurance options, starting to develop your financial plan, or just looking for mortgage and PMI insurance information or how to avoid PMI this newsletter will give you the information you need to have before consulting with a lending professional. With your newsletter you will begin to learn about the following topics that affect your PMI Insurance and much much more:
- Credit Score and its affects on your mortgage
- The Homeowners Protection Act and borrower cancellation of PMI on home mortgages.
- How to use PMI Insurance to your advantage
- FHA Loans as a viable alternative to conventional loans with PM.
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|
***Please note all information we collect at RightWay is held in strict confidence. We do not sell or share our customer list with any other entities under any circumstances. |
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