Never Pay For Private Mortgage Insurance

11 May

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A big mistake that some homebuyers make is putting too small of a down payment on their home, setting themselves up to pay for Private Mortgage Insurance (or PMI). Redondo Mortgage Center wants to help you understand what PMI is and why it may be a big mistake for you to pay for it.

 

  1. YOU DON’T HAVE TO!

The best thing about PMI is that paying it is totally up to you. There is a hard and fast rule regarding PMI: no matter what your credit score is or how great of a financial bargain you look like on paper, your lender will apply PMI to your loan if you put down less than 20% of your home’s value. Lenders view a loan for more than 80% of a home’s value as being inherently more risky than one that is less than 80% of the loan’s value.

  1. PRIVATE MORTGAGE INSURANCE IS NOT FOR YOU

The idea of paying PMI is parallel to throwing money out the window. This premium, which most homebuyers pay as part of their monthly payment, ends up being about one to two percent of the outstanding loan amount. That means if you take out a loan of $150,000, your monthly PMI payment would be around $125 per month of money that you’re throwing away just to insure the lender that you won’t default on your loan. This money doesn’t benefit you in any way!

  1. IT’S TOUGH TO GET RID OF

Applying PMI to your loan is easy up-front, but once you have your home paid down to less than 80% of the total value and you’d like to have the PMI removed, it’s pretty tricky! You’ll have to get a brand new mortgage on your home in most instances, meaning you’ll need to have it re-appraised to prove the value versus what you owe and apply for a refinance through your bank – a process that can take months.

Contact See Me Home Solutions expert team of real estate investors to get cash for your home quickly, to help you get on your way to your financially successful future! Visit Redondo Mortgage Center online at www.RedondoMortgageCenter.com or call 310-318-8999 today.



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