Tidbits of PMI (Private Mortgage Insurance) So today, we sat down for a PMI (Personal Mortgage Insurance) lesson with our in-house mortgage broker, Dan Ianniello of Connecticut Home Morgage. We learned a lot about PMI or MI (mortage insurance) as it's sometimes referred to.
Here are the tidbits of PMI that we learned:
- There are six (6) companies that provide PMI to consumers and these companies provide different types of PMI products to consumers.
- The premium for PMI is based upon many factors with the amount of money a buyer is putting down as one of them. For instance if you are putting down 10%, the PMI rate would be around .62.
- Your credit score is one of the criteria used to price PMI.
- If you are only putting down 5% and your credit score is under 680, you may want to consider an FHA mortgage.
- PMI only insures the difference between what you put down on the purchase and 20% of the purchase amount. So if you put down 10% to purchase your home, PMI insures only the next 10%.
PMI isn't an exciting topic of conversation and most homebuyers don't really understand it. What they do understand is that it costs them more money every month when they pay their mortgage.
These are just tidbits of PMI (Private Mortgage Insurance). If you have questions about PMI, your mortgage broker should be able to answer them for you.