100% Mortgage Financing A Way To Avoid Private Mortgage Insurance
Ideally, traditional mortgage lenders want new homebuyers to have a 20% down payment when purchasing a new home. Thus, if purchasing a $200,000 home, you should be prepared to have $40,000 as a down payment.
Unfortunately, many people do not have this kind of money lying around. For this matter, private mortgage insurance (PMI) was created as a way for mortgage companies to recoup their money if a homeowner defaults on the loan. There are various loans available to assist people with down payments. In some instances, homeowners can obtain 100% financing, and avoid PMI
What is Private Mortgage Insurance?
Because Americans are earning less money, and home prices are steadily increasing, the majority of the population is unable to save the recommended down payment of 20%. In order to make owning a home possible, mortgage companies created a particular mortgage insurance, (PMI), for people with less than 20% to put down on a home. This insurance protects the lender if you default on the mortgage.
How to Avoid Paying Private Mortgage Insurance
On average, PMI may increase...