PRIVATE MORTGAGE INSURANCE

Private mortgage insurance is a type of insurance that protects lenders in case a borrower defaults on their mortgage payments. It is typically required by lenders when the borrower makes a down payment of less than 20% of the home purchase price. A veteran using a VA loan is exempt from this. Private mortgage insurance provides financial protection to the lender by covering a portion of the loan amount in the event of a foreclosure. This insurance allows lenders to offer mortgages to borrowers with a lower down payment, as it mitigates the risk of default. This type of insurance comes from the housing market crash in 2005 with lenders approving unethical loans that borrowers were truly not qualified for.

BENEFITS

Private mortgage insurance benefits the lending institution, the borrower is the one who pays for the insurance. the cost of private mortgage insurance is typically added to the borrower's monthly mortgage payment. the amount of private mortgage insurance paid depends on factor's such as the loan amount, credit score and down payment amount. It is important to know that private mortgage insurance is not permanent. Once the borrower has built up enough equity in the property, typically by reaching a loan to value ratio of 80 percent, they can request to have private mortgage insurance removed. This can be done by paying down the mortgage balance or through appreciation of the property value.

Overall, private mortgage insurance allows borrowers to obtain a mortgage with a smaller down payment, but it is an additional cost that should be considered when budgeting for homeownership. See a trusted advisor for more resources. 

TRUSTED ADVISOR

As a trusted advisor, professional realtor and military veteran I am here to serve you and the Dr. Phillips and Central Florida area housing market to purchase or for the sale of your home. In the absence of trustworthy information whether  it's a housing crisis or local housing market, real estate decisions are increasingly driven by fear, uncertainty and doubt. We as trusted advisors drive the real estate community to ensure you are making the right decision. 

Part of my job is to keep you informed and educated of the local housing market trends, pricing and inventory level, buying information on the buying and selling process to include common real estate terms and videos. It is important to keep updated on the market trends, don't get confused with the media, they talk national data, I can provide the most up to date local area data.

So don't let this shifting housing market delay your dreams, data reveals home values typically appreciate over time and that gives your net worth a nice boost. When you are looking for a home, look for your realtor with the heart of a teacher. If you are ready to start your journey, contact me today at 850 496-6412 to begin a new walk to homeownership and all your real estate needs. Referrals always welcome.