Today we will talk about Private Mortgage Insurance (PMI). Most people need to carry their mortgage when they purchase a home, unless you are buying it with your retirement money . When a lender allows taking mortgage with very little money down, they need to protect themselves. That’s where Private Mortgage Insurance (PMI) comes in. If your down payment is less than 20% a lender will allow taking out an insurance policy that will protect them if you are unable to meet your financial obligations. That policy is called Private Mortgage Insurance (PMI).
If you are ever in default of paying your mortgage then Private Mortgage Insurance (PMI) policy will protect the lender. The price of the EMI is usually included into its monthly mortgage payments.
Private Mortgage Insurance (PMI) benefits both the borrower and the lender. The lender is assured that they won’t lose any money and the borrower is allowed to become a home owner with significantly less cash outlay. You may even be able to take a tax deduction on EMI of Private Mortgage Insurance (PMI) payments.
Filed in: Insurance
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