What is private mortgage insurance (PMI) and do I have to pay it?
• Private mortgage insurance acts as a security insurance for the lender. If a borrower does not have 20%down on a purchase or 20% equity for a refinance, private mortgage insurance is charged to the loan to protect the lender against default. Either you pay p.m.i. in a monthly payment or with a higher interest rate. How much house can I afford? • This is a typical question a new home buyer asks. The only correct answer should be whatever type of payment you feel comfortable making each and every month. This is more of a budget question than anything. Our loan officers can certainly determine how much we can qualify a home buyer for, but ultimately the decision should be made by understanding what type of payments a buyer feels comfortable with. Too many people allow others to determine what they can afford and this is how they get into trouble! How much down payment will I need to buy a home? • There are many lending programs that do not require you to have any money down at all. This
