Boca Mortgage Blog

Is PMI Important?

April 10th, 2015 8:04 AM by Leonard Silvestri

PMI or Private Mortgage Insurance acts as a supplemental insurance policy for your mortgage loan. Having PMI has been a huge benefit for many homeowners. Putting PMI in place means lowering the down payment for many mortgages. This huge benefit makes purchasing a home affordable for many buyers. The PMI calculation is unrelated to credit history but primarily based on the plan type of your loan. PMI payments are normally included with the monthly mortgage payment and commonly equate to one-half of one percent of the mortgage being covered.

Eliminating the Need for PMI

As any unnecessary costs, the need for PMI can also be eliminated by taking certain steps in preparing to purchase your home. For example, saving up enough money for a minimum 20% down payment can help eliminate the need for PMI. However, if buyers find themselves unable to save up enough cash for the down payment, PMI provides an alternative solution and allowing them to still purchase the property. The use of PMI is especially beneficial for first time homebuyers looking to leave the rental market and own something of their own.

If you’re looking to purchase your first home and have questions about securing a mortgage, how credit can affect your purchase and if you need private mortgage insurance contact our Boca Raton Mortgage office today. Call (561) 395-4264 to schedule a consultation. Our experts will sit with you and answer all of your mortgage questions. Our goal is to educate you on the best options for your specific circumstances and to help you secure a mortgage for the home of your dreams.

Posted by Leonard Silvestri on April 10th, 2015 8:04 AM


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