We get a lot of questions about Real Estate in Santa Clarita. This week we’re answering your question what is Private Mortgage Insurance (PMI)?
A: When your down payment is less than 20%, you usually have to pay for Mortgage Insurance, (PMI). This protects the lender in case you don’t make your house payments, they repossess your house, and they have to sell it for less than the amount left on the loan. Thanks to PMI, banks will take loans with very low down payments. That makes it much easier for you to get into a home.
FHA Loans are a kind of mortgage insurance. You pay fees to FHA in exchange for their guaranteeing your loan to the bank, so the bank will let you put less than 20% down. It’s not private mortgage insurance, since FHA is the government, not a private insurance company, but it works just like PMI.
If you are considering making the jump into home ownership, contact us here, or at 661-373-2374.
