| Buying a new home for the first time is a very | | | | you in any way. Not only does this add additional |
| stressful and exciting time in many people lives. A | | | | money to your monthly payment you are also paying |
| home represents the biggest investment many | | | | your own hard earned money to protect your |
| people make and it is considered the foundation of | | | | lenders financial interests! This is the main reason |
| long term wealth building. And with the many no | | | | many people wonder how to get out of PMI |
| money down programs available today owning a | | | | payments! |
| home has never been easier! | | | | Loans For Eliminating PMI |
| Although most lenders would like you to put down a | | | | There are programs that are designed to eliminate |
| down payment of twenty percent this rarely | | | | PMI on mortgages. These are typically known as split |
| happens in real life. Lenders know they will not have | | | | mortgages or combo loans. A split mortgage is |
| customers if they require such a large down | | | | basically two loans, with the first mortgage being for |
| payment. They also know that writing a home loan | | | | 80% of the loan amount. And the second mortgage |
| that has no down payment can be a risky deal. | | | | being for the remaining 10-20%. Because the first |
| In order for the lender to write loans and protect | | | | mortgage is only for 80% of the homes value the |
| themselves a insurance policy known as private | | | | PMI is eliminated. The only drawback is the second |
| mortgage insurance, or PMI is taken out against the | | | | mortgage rates are much higher, often times |
| loan. This insurance is paid by the borrowers on a | | | | approaching 10%. |
| monthly basis and protects the lender in the event | | | | You will also incur extra closing costs because the |
| that you stop making your payments and your | | | | title company will have to prepare paperwork for |
| property needs to be foreclosed on. Keep in mind | | | | two loans instead of one. Even with the added |
| that this is not disaster or homeowners insurance and | | | | expense you are better off with a split mortgage |
| will not cover any damage to your home or benefit | | | | loan because the interest paid is tax deductible. |