The Importance of Budgeting for PMI in Pompano Beach
PMI stands for Private Mortgage Insurance. This kind of insurance protects lenders if their borrowers stops making their monthly payments on their home loans. Mortgage lenders must purchase PMI if their borrowers have a down payment that is less that 20% if the home’s sale price. PMI premiums are added to the borrowers’ monthly mortgage payments. It is not uncommon for homeowners to forget about the PMI. In fact, according to a survey by TD Bank, more than three in five people who bought a home in the past 10 years ended up with higher monthly mortgage payments then they expected because of PMI premiums.
More homeowners in Pompano Beach, FL get PMI included in their monthly mortgage payments. About 37% of those who purchased a home in the last 10 years had to pay for mortgage insurance. They couldn’t make at least 20% of the down payment, so that is what had to happen. Of the homeowners who bought a home in the last two years, 43% paid for PMI. That is almost half. That’s shocking.
Michael Copley, executive vice president of retail lending at a TD Bank says, “PMI has had a definitive impact on many homeowners.” Many have rethought or delayed buying a home in light of not being able to meet their monthly mortgage payments. PMI premiums vary depending on the size of the home loan, the down payment of the home, and the borrower’s credit score.
PMI looks very different for those homeowners who have FHA loans. The Federal Housing Administration requires all borrowers to pay for PMI for the life of the loan, regardless of how much equity is gained over time. Other types of loans give borrowers the opportunity to get rid of their PMI if they gain equity or pay down the mortgage. As you can see, FHA loans are unique. Generally, FHA PMI is more expensive than the insurance on conventional private mortgages. The FHA just recently announced that it will reduce the PMI premiums if the buyers get housing counseling through a program known as HAWK, which stands for Homeowners Armed With Knowledge.
If you are a home buyer in Pompano Beach, FL and you would like more information on PMI and how it will look like with a particular mortgage loan, you can count on the mortgage experts at Ace Mortgage Loan Corporation. Ace Mortgage Loan Corporation is a home mortgage lender that can assist you with calculating how much you will pay for your loan. A representative of Ace Mortgage Loan Corporation will sit with you and go over what home loans will fit best with your budget. The representative will determine what your PMI premium will be, what your interest will be, and what your monthly mortgage payments will be. Ace Mortgage Loan Corporation is a mortgage company that has more than 15 years of experience in the housing market industry. You can trust them with your plans of purchasing a home. Call Ace Mortgage Loan Corporation today at (954) 777-4774.