Get Smarter With Your Mortgage

Reduce the risk to the lender

Reducing the risk to the lender often comes from your own pockets. If you don't put a high enough down payment into consideration at purchase you will become a risk to the lender. When you become a risk to the lender, Private Mortgage Insurance (PMI) is a requirements to carry the loan. This is only true when your loan is not federally back. VA and FHA mortgages are backed by the federal government and require different offsets through the entirety of the loan. While they are not the same, directly they both approach the main concern of becoming a risk to the lender. If you are going to pay a fee for carrying private mortgage insurance, knowledge is key. There are other offsets that reduce the amount of private mortgage insurance (PMI) you will pay monthly. Pay less by knowing more about the risks.

1. ARM's require higher PMI than Fixed rate

2. Investment properties require higher PMI than residence

3. Lower down payment requires higher PMI than larger down payment

4. Lower the credit score the higher the PMI

Often times we get our home and feel content for years and do not consider re-evaluating our home mortgage. Are homes selling for more today? If you think the value of your home has appreciated, than you may need no more money down and a simple refinance to get you to the 80/20, which will eliminate you PMI. Often, your rate can get considerable lower if the rates reflect a low rate with the home buying market. Even if you cannot get a lower rate, the cost of private mortgage insurance has been eliminated monthly, supporting a gain in finances.