Can someone help me figure this out? For those lenders that have PMI what is it and what does it do for you? When would this insurance be collected on?
[addsig]
PMI, private mortgage insurance (I think), is to protect the lender. If you default on your mortgage, the lender can collect the damages from the private mortgage insurer.
Traditionally, PMI is required if the loan to value is greater than 80%.
Bottom line, it is only an expense for you, and you don't want to know what happens when it is collected on...
An experienced mortgage broker can get you a loan without PMI.
I rencently had a client with 538 credit score, stated income, 50% DTI, and we got an 80/15 loan for her. In addition, I enrolled my property into the Nehemiah program which paid the 5% down!
It's out there you just need to find who can help you.
The reason I ask is because I was debating w/someone about what PMI is actually for. Lets assume I default on my loan, the bank is only expecting to get 80% value of the loan out of the sale of the house. The PMI is the insurance to make sure they will get the other remaining 20%. Is this close?
Frogger,
Care to share?
I have never sold a property; getting ready to sell my primary and looking at what I should do w/a rental or 2.
That sounds like an excellent broker and smart teamwork. Nice. C~
PMI, private mortgage insurance (I think), is to protect the lender. If you default on your mortgage, the lender can collect the damages from the private mortgage insurer.
Traditionally, PMI is required if the loan to value is greater than 80%.
Bottom line, it is only an expense for you, and you don't want to know what happens when it is collected on...
An experienced mortgage broker can get you a loan without PMI.
I rencently had a client with 538 credit score, stated income, 50% DTI, and we got an 80/15 loan for her. In addition, I enrolled my property into the Nehemiah program which paid the 5% down!
It's out there you just need to find who can help you.
The reason I ask is because I was debating w/someone about what PMI is actually for. Lets assume I default on my loan, the bank is only expecting to get 80% value of the loan out of the sale of the house. The PMI is the insurance to make sure they will get the other remaining 20%. Is this close?
:-D
[addsig]
that is precisely right. . . . . . it ensures that the mortgage holder is protected beyond the 80% LTV in the event the borrower defaults.
Frogger,
Care to share?
I have never sold a property; getting ready to sell my primary and looking at what I should do w/a rental or 2.
That sounds like an excellent broker and smart teamwork. Nice. C~