Articles Editor's Blog Reader Mail

Private Mortgage Insurance Belton MO

PMI will cost you money. In most cases, you will pay a monthly premium based on the amount of outstanding mortgage debt. This can add up, so it is not necessarily a cheap alternative to saving up to buy a home. But, it does get you in the market sooner and with housing prices generally on the rise, sooner can be a good thing.

Agri-Risk Services
(913) 897-1699
7540 W 160th Street
Overland Park , KS
 
The Heartland Gallogly Agency
(913) 345-9090
4400 College Blvd #370
Overland Park, KS

Data Provided by:
Luengo Insurance Agency and Consulting Firm
(913) 248-7790
11083 Hauser St
Lenexa, KS
Alternate Phone Number
913-248-7790
Services
Insurance Agency, Kansas City Life Insurance, Kansas City Auto Insurance, Kansas City Commercial Insurance, Kansas City Homeowners Insurance
Prices and/or Promotions
Insurance and Consultatation

State Farm Insurance - Ron Culp CLU ChFC
(913) 648-0585
9407 W 87th St
Overland Park, KS
Alternate Phone Number
(913) 648-0585

Retirement Solutions Group
(913) 685-9422
110 South Cherry Street 3rd Floor
Olathe, KS
 
Agri-Risk Services Inc
(913) 897-1699
7540 W 160th St
Stilwell , KS
 
Allstate Insurance
(913) 851-0522
12920 Metcalf
Overland Park, KS
Alternate Phone Number
(913) 851-0522
Services
auto, homeowner, renter, commercial

Goodman, Dave - State Farm Insurance
(913) 764-4000
1990 E Santa Fe Suite 201
Olathe, KS
Alternate Phone Number
800-369-0404

Jerome Harris Insurance Agency
(816) 741-2010
1103 Westport Rd
Kansas City, MO
Alternate Phone Number
816-741-2010
Services
Insurance

Farmers Insurance Group
(913) 248-7790
7220 Renner Rd
Shawnee, KS
Alternate Phone Number
913-248-7790
Services
Business, Work Comp, Auto, Home, Life

Data Provided by:

Private Mortgage Insurance

Provided By: 

Private Mortgage Insurance


Private mortgage insurance (PMI) helps you get into a home faster. Why? Because it allows you to buy with less than 20 % down, but still reduces the risk to your lender so that you don't have to pay higher rates of interest.

Now why do lenders want 20% down? That magical 20% generally assures the lender that if the lender has to foreclose, the lenders loss will be completely recovered.

Having said that, if lenders exclusively gave mortgages to folks with 20% down, there would be a lot of us who would be renting. (My first home was purchased with mortgage insurance. I only had about 10 % down.) With so few people able to qualify to get mortgages, the demand for houses would be MUCH less.

Lets face it: saving up 20% of the purchase price of a home is a BIG chunk of money. Most of us would have a hard time doing it. If you were looking at buying a home worth $300,000 that would mean you'd need $60,000 in savings! It's a huge challenge.

So, what do you do? You get private mortgage insurance. Here are the basics of how it works: You get a policy. Then, you purchase your $300,000 home with less than $60,000 down (assuming you can qualify for the mortgage amount). Your PMI policy provides a guarantee to your lender that if you default, the insurance policy will compensate for much or all of the loss to them. And you become a homeowner.

In effect, you buy now, buy with what you have, and use PMI instead of a hefty down payment.

There are various PMI plans and they typically work like this:

  • The more you put down, the less coverage you need. In other words, more insurance is required with 5 percent down, less insurance with 15 percent down.
  • Adjustable-rate mortgages, ARMs, are perceived as more risky than fixed-rate loans, thus PMI costs are somewhat higher.
  • The borrower pays for PMI coverage, but if the loan is defaulted, the lender is the policy beneficiary.

You do have to keep in mind that it is possible for a lender to conditionally approve a loan, and also for a PMI company to decline coverage. It's best to have ensure you qualify for the mortgage amount as well as for PMI coverage before you start to shop for a home, if you want the best outcome.

PMI will cost you money. In most cases, you will pay a monthly premium based on the amount of outstanding mortgage debt. This can add up, so it is not necessarily a cheap alternative to saving up to buy a home. But, it does get you in the market sooner and with housing prices generally on the rise, sooner can be a good thing.

When does your PMI coverage (and premiums) end? This can depend on how aggressively you pay your mortgage. The HomeOwners Protection Act of 1998 (HPA provides that if the borrower has a good payment history, then once the original debt has been reduced 22 percent, PMI must be cancelled. Further, the rules also allow borrowers to request PMI cancellation after they have reduced their loans 20 percent.

However, ...

Click here to read the rest of this article from Insurance Guide 101

About Us | Contact Us | Link to Us | Privacy Policy | Terms of Use | Insurance Resources | Sitemap