What is Private Mortgage Insurance? (PMI)

Buying a home usually has a monster obstacles - coming up with a sufficient down payment. You can put down the traditional 20% down payment but the lender will be required to buy mortgage insurance.

The idea behind mortgage insurance is the same as with other insurance plans. You pay a monthly premium for the insurer to protect mortgage lender in the event of default. There are two types of mortgage insurance: government and private.

What is private mortgage insurance? (PMI)
PMI is insurance for the mortgage lender to use, not yours. It alleviation often required when the down payment on the purchase of a home is less than 20%. Because the lender is assuming more risk and receive a minimum amount of upfront money to buy, they will often call for the borrower to purchase private mortgage insurance.

How to get the Best Mortgage Rate

 

Several factors influence which mortgage rates trend over time, including the US Federal Reserve's asset purchases, housing demand for secondary market for mortgage-backed securities. But the greatest driver to get the best mortgage rate is still in power.

How do you qualify for the lowest mortgage interest rate? Lenders decide if you are a good risk for their money. The lower the risk, the better the rate. They want to study the income, credit score, employment history, liquid assets, down payment, and the type of property you are buying, and value.