If you have considered purchasing real estate without making a down payment of at least 20 percent, you may have heard of Private Mortgage Insurance or PMI. Before you agree to sign up for PMI, it is important to understand what it is and under what circumstances it may be beneficial to you.
What exactly is PMI?
Private Mortgage Insurance is an insurance policy on your mortgage. It protects the lender if you default on your loan. When you put less than 20 percent down payment on the purchase of your home, the lender assumes more risk. Since mortgage lenders do not like risk, they often require the borrower to get PMI when the down payment is small.
Contact Chris DePaepe for more information.