George L. Duarte

Mortgage Loans Fremont California Horizon Financial Associates

  • Home
  • About
    • About
    • Awards
    • Privacy Policy
    • California Privacy Notice
    • Accessibility Statement
  • Reverse Mortgage Library
  • Resources
    • Real Estate Corner Radio Show
    • VA Loans
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage FAQ
    • Mortgage Glossary
    • Closing Costs
    • Living Trusts
  • Reviews
    • Video Testimonials
    • Reviews
    • Write a Review
  • Apply Now
  • Contact

What You Need To Know About Mortgage Insurance

September 13, 2013 by George Duarte Leave a Comment

What You Need to Know About Private Mortgage InsuranceIf you are on the verge of buying real estate, you’ve probably heard the term Private Mortgage Insurance. Mortgage professionals talk about it a great deal, but you may be asking, “What is it exactly? And why should I care?”

Private Mortgage Insurance Defined

PMI is required by lenders if the down payment of a purchase is less than 20 percent of the home’s value. It protects the lender if the borrower defaults on the loan.

It also makes the lender more apt to loan, even if the down payment is as low as 3%, because in the long run, the lender’s investment is protected.

You Pay For It

Unlike other types of insurance which you pay to protect your interest in an asset, you pay Private Mortgage Insurance to the mortgage company to protect its interest in your new real estate. (Note that PMI is not usually tax deductible. Check with a tax professional for details.)

Make It Go Away: PMI Can Be Terminated Once You’ve Paid Down Your Loan

Once you pay down your mortgage to the point where it hits the magical 80% of the original purchase price or appraised value, whichever is less, you can request cancellation of PMI. The Homeowners Protection Act requires that loans made after 1999 include notifications to the borrower when you arrive at this point in your payments.

Your PMI payments must be automatically canceled once you pay down your loan to 78%. At closing, and on a yearly basis, you should receive information from your lender about when you can request cancellation.

Whether you’re ready to buy real estate or need more information before taking the plunge, I can help. Contact your trusted mortgage professional today.

Filed Under: Mortgage Tips Tagged With: Mortgage Tips,Mortgage Insurance,Home Buyer Tips

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sidebar View Lending Cert
NAMB Member Cert
Apply Now!
Mortgage Refinance Companies
NAMB
Veterans VABA Member
CMC Logo

Follow My Posts and Sign Up for My Newsletter!

Download Our App!



Horizon Financial Associates BBB Business Review

Connect with Me

Recent Awards

Mortgage Pros
2019 Best of Fremont 2017 Best of Fremont 2016 Best of Fremont
See More Awards →

Browse Articles by Category

Recent Articles

  • 3 Things That Will Absolutely Kill Your Chances for a Mortgage Approval
  • Mortgage Interest Rate Versus APR: What To Know
  • Navigating A Market With Higher Interest Rate
  • Understanding Mortgage Pre-Approvals and How to Avoid Being Declined for One
Horizon Financial Associates is a BBB Accredited Mortgage Broker in Fremont, CA
Equal Housing Opp
CRB Logo REALTOR logo

Our Location


39488 Stevenson Pl
Fremont, CA 94539

Copyright © 2023 · Powered by MySMARTblog