Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase.
This morning I sat down with Mark Waterman from Great Western Bank. Today we talked about PMI or Private Mortgage Insurance and how that can affect you. You can reach him at 605.627.0602 or Mark.Waterman@GreatWesternBank.com His office is located at 1302 6th St., Brookings SD 57006 or on the web at www.GreatWesternBank.com.
PMI or Private Mortgage Insurance
- All right, good morning everybody. Let me adjust this just a little bit there, so you can see my shiny head, let's get that going. So there you go, good morning. It's a Monday morning, it's 8.15, and that means it's our Monday Morning Mortgage Tips. I had a week hiatus here, we're back in the office, and we're ready to roll again here, but hopefully, first of all those fathers out there, hopefully you had a great Father's Day and a great weekend, and you're all rested and ready for this next busy week. This morning, got Mr Mark Waterman here from Great Western, and he is going to talk about today's Monday morning's mortgage tip, so take it away.
- All right Shane, thank you. I have had some recent inquiries, as to the private mortgage insurance. I don't recall if anybody's mentioned anything about it or not, but I figured I would touch on it. When you're looking to get a conventional loan, and you are putting less than 20% down, and you're getting financing on the secondary market, there will be private mortgage insurance, or PMI. The amount that you pay is dictated by the loan amount, the actual percentage that you're putting down. Credit scores come into play, and basically, that amount that you're paying, is insurance to protect the lender from you defaulting. You could be paying $20 a month, you could be paying $300 a month, depending on your loan size, and the other variables that come into play. We do have a couple of different companies, that we run through to try to get ya the best deal possible, specific to the loan that you're getting. It is potentially that fifth part of your loan payment, where you have principle interest, taxes and insurance, that PMI could be that fifth part. Obviously, we will run through that case by case scenario with the borrower, but once you do have that loan established, and you're making your monthly payment, once your loan gets to 78%, of that original value of the property, that PMI will automatically fall off. If during the life of the loan, you're looking at removing it, and you think you're at 80% of either that original property value, or potentially, you might be looking at getting an appraisal, you can contact the lender, and as long as you meet a few requirements, usually a two year period. You have to make a written request, you have to make sure you make your monthly payments on time, they reward you for that. But there is potentially, through contacting that lender, if you've made improvements, or your property has increased in value since you originally had purchased it, that potentially, you can get that PMI off sooner. Certainly, anybody can help, potentially guide you through that process, and what that would take as well. It's kind of a case by case scenario. There are different factors that come into play, but it is one more step to think about, and when you're trying to decide on how much money to put down, it is something to consider as well.
- Good, good, so like you said, just the fifth portion of that payment there, some people don't think about the PMI. So if you've got any questions for Mark, feel free to reach out to him. As usual, his information's on the top, on the bottom, on the sides, wherever your device allows you to see it. I'll have all of his information there, feel free to reach out, give him a call, email him or whatever it takes, if you have questions on that PMI. Stop into the office too, he'd be happy to talk to ya. If you have other questions for us, that you'd like answered on our next episode, feel free to let us know. Again, comments in the section there, and we'll be happy to answer that on our next episode, and kinda roll with it there. So that concludes this Monday morning's Monday Morning Mortgage Tip. Thanks everybody for watching, until next week, we'll talk to you guys later. Have a great week, see ya.