Homebuyers who wish to acquire affordable home ownership will usually go for mortgage programs that require a down payment smaller than 20%. While there is nothing wrong with such home loan options, it does have its disadvantages. For one, you’ll need to pay for Private Mortgage Insurance.
Defining Private Mortgage Insurance
Private Mortgage Insurance is a costly type of insurance you’re required to pay when availing conventional mortgages. PMI is not an insurance that aims to protect you as the borrower, but the lender instead in case you fail to repay the loan. If you can’t afford home loan programs that require at least 20% down payment, expect that you’ll have to pay for PMI.
The Silent Benefits of Private Mortgage Insurance
Since PMI is an insurance paid by the mortgage borrower but protects the lender, many views Private Mortgage Insurance as one-sided. However, it does have it’s silent benefits. …Continue reading