What is Private Mortgage Insurance? | Valor Lending Group
Are you wondering what Private Mortgage Insurance is?
Valor Lending Group is here to answer all of your questions!
What is Private Mortgage Insurance?
Private mortgage insurance, also known as PMI, is a type of mortgage insurance from private insurance companies. Conventional loans have PMI. This insurance is used when there is less than 20% down payment and is provided on traditional and FHA financing. There are two differences between Conventional PMI and FHA PMI.
That said, Conventional PMI only stays on the mortgage financing until the principal balance reaches the 80% loan to value threshold. FHA Private Mortgage Insurance will remain on the loan, payments will be made to the PMI company unless refinanced to value below 80% or paid off in full. Like other kinds of mortgage insurance policies, PMI protects the lender if you stop making payments on your home loan.
Private Mortgage Insurance can be arranged by the lender and provided by private insurance companies. If you are required to pay private mortgage insurance, it typically makes up a portion of your monthly mortgage payment, in addition to your principal, interest, property tax, and homeowners’ insurance. Like interest, property tax, and homeowner’s insurance, the amount of your PMI does not build equity in your home.
https://www.zillow.com/mortgage-learning/private-mortgage-insurance/#what is PMI?
How do I pay for Private Mortgage Insurance?
There are a few different options to pay for private mortgage insurance. Payment options will depend on your lender, some offer one option well other may offer more than one. You will find different payment options below.
Monthly Premium:
Monthly premium is added to your mortgage payment and is one of the most common ways that are used to pay PMI. You will find this premium on your loan estimate and closing disclosure. It is located in the projected payments section.
Up-front Premium:
Up-front premium is paid at closing and will be located on your loan estimate and closing disclosure in section B.
Up-front and Monthly Premium:
In some cases you may pay with both up-front and monthly premiums. As stated above up-front premiums are located on your loan estimate and closing disclosure in section B and monthly premiums are located on your loan estimate ad closing disclosure in the projected payments section.
Make sure to ask your loan officer to assist you in calculating the total costs of PMI in a few different ways so that you have a good idea of what will be the most beneficial for your particular scenario.
Private mortgage insurance
In short, PMI is a type of insurance required on conventional loans where the loan amount is greater than 80% of the property value on purchase price. For conventional loans, the PMI may be eliminated once a minimum of 20% equity has been established.
BORROWER PAID MORTGAGE INSURANCE (BPMI)
Is a predetermined premium amount that is added to your monthly mortgage payment.
LENDER PAID MORTGAGE INSURANCE (LPMI)
Allows the borrowers to waive the monthly premium amount and the overall monthly payment is typically less than a loan with BPMI but with a slightly higher interest rate.
Valor Lending Group can fund your fast-hard money loan up to $10mm in as little as 7 days often without an appraisal.
Please do not hesitate to CALL or EMAIL for any scenarios.
Recap of our Loan Products:
- Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
- Stated Income Loans (Great for business owners and self employed ) No tax returns!
- 100% financing is available (we can cross collateralize other properties if there is enough equity)
- Valor VA Home Loan 100% financing up to $1.5MM
- Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow – No DSCR Coverage needed!
- Flipper & Rehab Loans (Flip a property with one of our many options)
- 2nd Position Loans up to $5mm
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up.
- Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
- Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
- Acreage Properties
- Commercial Loans up to $500mm
- 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
- Foreign Nationals Loans (no social security or residency required)
We Also Offer
- Conventional Conforming Loans
- High Balance Conforming
- Jumbo Loan Financing to $10 Million / 10% down Jumbo to $1.5mm
- FHA, USDA
- Reverse mortgages up to $1 Million Value
- Cash Out Refinancing
CALL or EMAIL for immediate attention to your scenario!
**Rates and terms subject to change without notice
For the most up to date mortgage news visit: Mortgage News Daily
Check out our GOOGLE REVIEWS
Did we miss anything?
- Call or Email me (Christopher Lapping) if there is any information that we have missed
- Follow us on Social Media
- Share this on your Social Media
- Do not hesitate to give us your feedback
- Ask us for a quote
- Visit our homepage to check out what Valor Lending Group has to offer
