If you are a home buyer in Massachusetts or Rhode Island or anywhere in the country for that matter and you do not have 20% to put down on a home, you will have heard the words Private Mortgage Insurance or PMI.
PMI is insurance that covers the rest of your downpayment in case of default. PMI is a necessary evil because very few home buyers have 20% to put down. In fact, a 20% down payment buyer is rare in the real estate world. The normal for down payments are 0%, 3.5%, and 5% and there are mortgage programs for virtually everything in between so take heart if you are not among the small percentage of 20% downpayment buyers. There is a mortgage program out there for you. There are some mortgage programs that individual states have that do not require 20% downpayment and do not carry PMI so you would need to check with your lender as to which loan program you qualify for because each loan program has a variety of requirements on income, debt, etc. but it is ALWAYS worth asking them.
When you get a mortgage that has PMI, you will be paying a monthly insurance premium for this and it will be included in your monthly mortgage payment along with your principal, interest, property taxes and homeowners insurance.
PMI can be removed once you have reached the point where you have enough equity in your home to remove it. It usually takes several years for this to happen and in many cases you will need to refinance your mortgage in order to have it removed.
The Key to the Dream Realty Group is devoted to making your transaction as smooth as possible. If you are buying or selling in Bellingham, Franklin, Medway, Wrentham, Norfolk, Walpole, Blackstone, Millville, Mendon, Hopedale, Norton, Plainville, Easton, Sharon, Mansfield, Foxboro, Milford, Cumberland, Smithfield, North Smithfield, Burrillville, or Lincoln contact us today at 508 254 8093 or start searching for homes now by visiting here.
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