PMI is it Right for You?
Private Mortgage Insurance Options
PrivateMI is available on a wide variety of loans and loan amounts. Your lender can help you determine which premium plan is right for you and will make all of the arrangements for obtaining insurance from the PrivateMI company.
Lenders typically pass the costs of lending money on to borrowers, and PrivateMI is one of those costs. Lender-paid policies also are available, but they result in a higher interest rate on the mortgage.
The cost of PrivateMI depends on several factors: the size of your down payment, the type of mortgage you are getting, and the amount of coverage the lender or investor requires on your loan. Ask your lender about premium costs for your loan.
Premium Options
PrivateMI companies have created a range of premium options to meet your needs:
- § Monthly premium - This is pay-as-you-go insurance. With this plan, your PrivateMI payment is folded into your monthly mortgage payment. It is a good choice if you want to minimize your closing costs.
- § Single premium - With this plan, you finance a one-time premium as part of your loan. It is ideal if you want to keep both your closing costs and your monthly mortgage payments at a minimum.
- § Annual premium - This plan allows you to pay an upfront premium, which can be financed with an annual renewal.
- § Lender-paid mortgage insurance - With this plan, the lender pays the PrivateMI premium. You pay a higher interest rate for the life of the loan to cover the lender's higher cost of loaning you money, but the interest payments are tax deductible. This plan reduces closing costs and monthly payments for many borrowers. However, it cannot be canceled.
PrivateMI is the key that unlocks the door to homeownership for more and more Americans-particularly first-time buyers, low- and moderate-income buyers, new Americans, and rural and inner-city buyers. Two out of five home buyers use PrivateMI to become homeowners and enjoy its rewards: personal satisfaction, stability for themselves and their families, a sense of community, privacy and an investment in the future.
For more information on how PrivateMI can help you buy the home of your dreams with a low down payment, contact your local lender.
Benefits of MI
Why should you consider a loan with PrivateMI? The reasons are clear.
- § Affordable: In many cases, PrivateMI is more affordable than other financing options - such as 80-10-10 piggyback loans, where home buyers increases their debt load with two mortgage loans.
- § Predictable: With other financing options, the homeowner's monthly costs go up when interest rates rise - but PrivateMI premiums are fixed and predictable, regardless of rising interest rates, and eliminate the risk of large balloon payments.
- § Cancelable: A loan with PrivateMI has a host of advantages over other financing options, but that doesn't mean you'll always need it - and it can usually be canceled when the homeowner acquires 20% equity in the home.
- § Deductible. If your annual household income is $100,000 or less, you may deduct the full cost of your PrivateMI premiums on your federal tax return for the 2007 tax year.
For more information visit http://www.privatemi.com/