What is Private Mortgage Insurance (PMI)?
One of the biggest questions homeowners ask when deciding to buy a new home is, “How much money should I expect to save as a down payment?” The answer to that question determines how much, if any, Private Mortgage Insurance (or PMI) is required on the loan.
PMI is specialized insurance designed to protect lenders from loss when homeowners are unable to put at least 20% down on their home. Contrary to historical advice, new homeowners don’t necessarily need to avoid PMI, especially if putting less money down is better for their overall financial health. In fact, putting less money down, paying PMI until home equity reaches 20%, and managing affordable monthly mortgage payments opens the door for new homeowners in various income brackets and stages of financial savings.
Eastbrook Home’s Preferred Lender and Loan Officer Becky from Lake Michigan Credit Union joins us to discuss a number of exciting loan programs developed specifically for homeowners looking to put less than 20% down on their new home. She shares important tips about PMI and answers some of the most common questions she receives when assisting new homebuyers. Join us as we listen to her expert advice about homeownership, mortgage insurance, and down payment strategies.