What is Private Mortgage Insurance?
Private Mortgage Insurance (PMI), is typically required if you put less than 20% down payment on a home. PMI fees vary, depending on the size of the down payment and the loan, from around 0.3% to 1.15% of the original loan.
So how can you lessen this burden and even get rid of PMI?
Take out a second loan to cover the 20% percent. With this process, known as "piggybacking," borrowers can usually deduct the interest on both loans on their federal tax return and avoid paying PMI.
A second option is to have your PMI eliminated by building equity in your home. You can do this through a combination of making extra payments on your loan principal, making improvements to your home that increase its value, and through the appreciation of your homes' value through the course of time.
I hope this has been helpful information. Let me know if you have any questions about PMI or any other home buying questions. I will be happy to talk with you.
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Tawana Bourne | 860.834.1220
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*Disclaimer. Q&A’s are for marketing purposes only and are not intended to offer real estate advice to non-represented parties. Please consult with a real estate professional under their contractual representation for answers to your real estate questions.