Private mortgage insurance is necessary for buyers who don’t
have or choose not to put 20% or more down payment when they purchase a
home. It is required for high loan-to-value mortgages and it provides
an opportunity for many people to get into a home who otherwise would not be
The problem is that it is expensive and a homeowner’s goal
should be to eliminate it as soon as possible to lower their monthly payment
and avoid putting good money down the drain.
FHA loans made after 6/1/13 that have 90% or higher
loan-to-value at time of purchase have mortgage insurance premium for the
life of the loan. FHA loans made prior to 6/1/13, can have the MIP
removed after five years and if the unpaid balance is 78% or less than the
VA loans do not require mortgage insurance.
Conventional loans, in most cases, with higher than 80%
loan-to-value require mortgage insurance.
The cost of that insurance
varies but with a $250,000 mortgage, it could easily be between $100 and $200
Your monthly mortgage statement should itemize what your monthly
fee is for the mortgage insurance. Unlike interest that is deductible,
most homeowners are not able to deduct mortgage insurance premiums.
If you plan to remain in the home or to stay there for a
considerable number of years, the solution may be to refinance the home.
If the home has increased since it was purchased, the loan-to-value at
its new appraised value may not require PMI. You might even be
fortunate enough to obtain a lower rate than you currently have.
As a Residential Finance Consultant, I have the
training and experience to provide solutions to make homes more
marketable and help structure favorable transactions. Please
forward this article to your friends or family who could benefit from it.
We understand that for many people, buying or selling a home is probably the largest investment decision that they will make in their lifetime. Halo Group Realty LLC thus became active in selling Real Estate in 2008 and was setup to make this process a simple and painless transaction. Your dedicated agent will guide you every step of the way to make purchasing or selling your home enjoyable and exciting… as it should be!
Today, Halo Group Realty LLC is at the cutting edge of technology in offering assistance to those in need of real estate services, and we have revolutionized the method of delivering education to consumers. Halo is established as the place for consumers to get the knowledge and assistance they deserve in the process of facilitating the Real Estate transaction, positioning you in the best possible situation to get the best price when you either to buy or sell. With leadership, innovation and forward thinking, Halo Group Realty, LLC is poised to make a huge impression in the real estate market while providing clients the keys to home ownership.
Our goal is to help make your dream a reality and take away all of the stress that goes along with purchasing or selling your home. Whether you are purchasing new construction, an existing home, or just an open space for future enjoyment, representation by a Halo agent is a valuable tool in making your dream become a reality.