{"id":20017,"date":"2021-03-23T14:10:00","date_gmt":"2021-03-23T18:10:00","guid":{"rendered":"https:\/\/orlandorealtyconsultants.com\/?p=20017"},"modified":"2022-01-22T21:15:03","modified_gmt":"2022-01-22T21:15:03","slug":"pmi-and-how-to-get-rid-of-it-private-mortgage-insurance","status":"publish","type":"post","link":"https:\/\/orlandorealtyconsultants.com\/es\/pmi-and-how-to-get-rid-of-it-private-mortgage-insurance\/","title":{"rendered":"PMI and How to Get Rid of It: Private Mortgage Insurance"},"content":{"rendered":"

How to Eliminate  Private Mortgage Insurance<\/strong><\/h2>\n\n\n\n
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What\u2019s PMI and why am I paying for it? So many new homeowners, especially 1st<\/sup> time home buyers<\/a> have no idea what PMI even is. We\u2019ll break down what PMI is and even more importantly\u2026 how to get rid of it!<\/p>\n\n\n\n

So many homeowners want to know how to eliminate their PMI aka private mortgage insurance.<\/p>\n\n\n\n

If you\u2019ve recently bought a home without giving a down payment of at least 20 percent, then you were probably required to get private mortgage insurance<\/a>. Some new homeowners tend to get so caught up in the excitement of buying their new home, they didn\u2019t even notice their insurance payment was a little high. <\/p>\n\n\n\n

In the beginning, you don\u2019t even care\u2026 but as the months go by and you check out your mortgage bill you say wow!… my PMI is expensive!<\/p>\n\n\n\n

Of course, your first thought is \u201chow do I get rid of this PMI?\u201d This is actually one of the questions I get asked most often as an Orlando real estate agent. <\/a><\/p>\n\n\n\n

The truth is, getting rid of private mortgage insurance isn\u2019t that hard when you follow a few steps. <\/p>\n\n\n\n

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What is PMI or Private Mortgage Insurance?<\/strong><\/h2>\n\n\n\n

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My first-time homebuyers will ask me what is private insurance and why do I need it? Private mortgage insurance is in place to benefit the lender. It ensures the lender will be covered in case you stop making payments on your loan. If the home becomes a foreclosure, then the lender is covered against non-payment.<\/p>\n\n\n\n

The lender considers you to be high risk because you didn\u2019t have\nenough to cover 20% of the contract price. They want to be sure that if you can\nno longer make your payments, they are still covered. PMI unfortunately can substantially\nincrease your mortgage payment. <\/p>\n\n\n\n

For example, if you buy a house for 300k and your PMI is .5%, then you\u2019re paying an extra $1,500.00 per year. That comes to $125 per month. That\u2019s money you could\u2019ve used towards other bills. The kicker is that PMI is of no benefit to you and only benefits your lender\u2026 even though YOU pay for it!<\/p>\n\n\n\n

How much is private mortgage insurance?<\/strong><\/h2>\n\n\n\n

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The cost of your PMI will depend on a few different variables like the size of your down payment and your credit score. PMI payments can range from 0.3% all the way to 1.5%.<\/p>\n\n\n\n

Generally,\na loan with a smaller down payment will carry a much higher interest rate. If\ntrying to decide between a loan with PMI and one without, you need to calculate\nthe overall monthly cost of both loans before deciding.<\/p>\n\n\n\n

When you\nunderstand these costs, it will help you determine what the best option is for\nyou and your current financial situation. You should also consider other\npopular loan programs like an FHA mortgage.<\/p>\n\n\n\n

No one wants to overpay on a mortgage because that\u2019s just throwing money away! That\u2019s why knowing exactly how to cancel your private mortgage insurance is of extreme importance to you.<\/p>\n\n\n\n

How is PMI paid?<\/strong><\/h2>\n\n\n\n

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If you have to pay PMI, you should know how it will be paid.\nAsk your lender if you have a choice on how to pay for your PMI.<\/p>\n\n\n\n

The 3 most\ncommon ways you can pay PMI:<\/p>\n\n\n\n