Private Mortgage Insurance Refinancing E-mail
At Eminent Mortgage Design, Inc. it is not our job to tell you what you need or do not need, however, simply to present your options to you. Then you can take the information to decide what fits your life and situation the best. In terms of carrying private mortgage insurance it is a decision that you must make when purchasing a home or refinancing. The definition of Private Mortgage Insurance (PMI) is:
   
    Insurance that reimburses the mortgage lender if the buyer defaults on the loan and the foreclosure sale price is less than the amount owed the lender (the mortgage plus the costs of the sale). A home buyer who makes less than a 20% down payment may have to purchase PMI.

    At Eminent Mortgage Design, Inc. it is not our job to tell you what you need or do not need, however, simply to present your options to you. Then you can take the information to decide what fits your life and situation the best. In terms of carrying private mortgage insurance it is a decision that you must make when purchasing a home or refinancing. The reality is not that you are usually just given the option with a particular lender, it is more a situation where some programs require PMI, while others do not. Generally, any FHA, VA, Fannie Mae or Freddie Mac loan that is made for over 80% loan-to-value (your loan amount versus the appraised value or purchase price of the house) will require Private Mortgage Insurance. However, you can restructure the loan to prevent mortgage insurance in some cases by breaking the loan into two loans. One made at 80% and a second mortgage made for the remaining balance.

    What are the pros and cons. First of all, the benefits to PMI is that if you are to foreclose the insurance covers the lender against any losses it might accrue. This may seem unimportant to insure the lender, but if they do not lose any money they will not come after you for any losses. On the other hand, PMI can become quite expensive, often times costing $200 or more per month. So as any insurance goes, it is very important to weigh the pros and cons. It is always a waste of money if nothing happens. But if something does it can be quite worth it. As for FHA loans, many times people can get a portion of their premiums refunded when the safely exit the loan, though refinancing or selling the property. So perhaps you are in a situation where you feel you no longer need PMI and would like a refund on your premiums, Apply today so a mortgage specialist can evaluate you current situation.



 
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