Private Mortgage Insurance, or PMI for short, is an insurance that protects the lender if the borrower can’t pay back the loan. Most homeowners in Georgia, and practically everywhere else, need a mortgage to buy their house. When you add the cost of the house, mortgages, fees, and so on, it adds up. One way to offset the balance to lower your initial down payment, to 20% or less.
While lenders may sanction loans with so little down, they need some form of protection in case the borrower defaults on their payments because of a lost job or some medical emergency. This protection is in the form of private mortgage insurance in Georgia. With this insurance in place, the lender can be assured that their loan will be repaid, even in the event of a foreclosure.
Most lenders include the private mortgage insurance amount with your monthly mortgage payment to make payments less confusing to you. While it looks like only the borrower benefits with private mortgage insurance in the form of the protection it provides, it also benefits you, the borrower, because it allows you the ability to buy a home without putting a large down payment.
If you are still confused and not so sure about private mortgage insurance, don’t worry, we the Moreira Team will help you understand its concept, benefits, and all the factors dealing with it. We will also help calculate how much insurance you will need to buy your home with minimal down payment so that you can finally own the home in Georgia you had always dreamed about.
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