Ethan Ewing, President of Bills.com, gives you free information on PMI, private mortgage insurance.
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Ethan Ewing, President of Bills. com, gives you free information on PMI, otherwise known as Private Mortgage Insurance. Bills. com offers consumers free mortgage quotes and tools to help you find, learn, and save.
"Hi, my name is Ethan Ewing, and I am the president of Bills. com. Today I want to talk to you about a very common mortgage term, PMI or Private Mortgage Insurance, for anybody that’s going to buy a house and is putting less than 20% down as a down payment you will be required to pay PMI, it just comes across just as a monthly premium, you pay it each and every month, it usually goes into your mortgage payment.
What PMI does is there is no benefit to you as a borrower, even though you are paying it, it is a benefit to the lender, the bank, the servicer whoever owns you a loan, in the event that you default. The reasoning behind it is in situation where a borrower or a buyer is coming and not bring a lot of money – not investing lot of money in that house, the bank wants to make sure they are covered in the event that you default. So, keep in mind, once you get to that 80% level, really once you get to 78% , you have built some equity in your house over time then the bank is forced or required by the government to drop that coverage and they will send you a notice saying that you don’t need to make this payment .
Hope that helps and we will see you next time."