Atlantis Appraisals
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What is PMI and how to get rid of it.
Private mortgage insurance, or PMI, is insurance to safeguard the lending industry
from loans that are financed greater that 80% of the appraised value of a home. In
todays lending environment, many homeowners finance their home purchase with
100% financing. So lenders require homeowners to purchase PMI to insure against
possible default of the loan that is above 80% of the loan value. This is why lenders
are willing and able to offer loans with less than a 20% down payment.
The monthly cost can be $40-$50 per month per $100,000. borrowed. The payment is
typically rolled into the monthly mortgage payment. When the equity in the home
reaches 78% of the original loan balance, the PMI can be removed. It is important to
check with the lender to determine the necessary procedure to remove the PMI
insurance. Typically all that is required is an appraisal that shows the equity value is
sufficient.
Private mortgage insurance, or PMI, is insurance to safeguard the lending industry
from loans that are financed greater that 80% of the appraised value of a home. In
todays lending environment, many homeowners finance their home purchase with
100% financing. So lenders require homeowners to purchase PMI to insure against
possible default of the loan that is above 80% of the loan value. This is why lenders
are willing and able to offer loans with less than a 20% down payment.
The monthly cost can be $40-$50 per month per $100,000. borrowed. The payment is
typically rolled into the monthly mortgage payment. When the equity in the home
reaches 78% of the original loan balance, the PMI can be removed. It is important to
check with the lender to determine the necessary procedure to remove the PMI
insurance. Typically all that is required is an appraisal that shows the equity value is
sufficient.