Private Mortgage Insurance

Private Mortgage Insurance

As a general rule, when you buy a house and your down payment is lower than 20%, your lender will require you to buy private mortgage insurance or PMI. Its purpose is to reimburse the lender if you default on your home loan.  PMI is included in your mortgage payment and it’s not cheap.  

However, not all homeowners are aware that you can remove this insurance after you reach 20% equity in the house. You can reach 20% by paying down your mortgage or if your house increases in value. 

We recommend you research this topic and check with your lender as soon as you reach the 20% equity in your home. Waiting until your lender terminates the PMI on your loan, as is required by law, could cost you months of unnecessary PMI payments. 

So, remember, once you have paid off 20% of your loan or have reached 20% equity in your house, save money by cancelling the PMI on your loan.

Kerr Insurance is always here to help! Call us at 1-877-332-6242 or 954-917-1707

 

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