Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be required to pay for if you have a conventional loan. It is a charge that is often added to your monthly payment amount when you make a down payment of less than 20 percent of the home’s purchase price.
Lenders sometimes offer conventional loans with smaller down payments that do not require PMI. Usually, you will pay a higher interest rate for these loans.
MIP is mortgage insurance on an FHA loan and is mandatory regardless of the amount of your down payment.
Both PMI and MIP can be removed from your existing loan under certain conditions. Your loan-to-value plays a key factor in this, as well as the date the loan was originated. Speaking to your lender about this will help you determine if you are qualified for removing this fee.
For more information on buying or selling real estate in Port Aransas, Texas or the Texas Coastal Bend, please contact the Saltwater Shores Team.
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