By David Sampson, US Bank
Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be required to pay if you have a conventional home loan. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan.
PMI is arranged by the lender and provided by private insurance companies. PMI is usually required when you have a conventional loan and make a down payment of less than 20 percent of the home’s purchase price. If you’re refinancing with a conventional loan and your equity is less than 20 percent of the value of your home, PMI is also usually required. Many homeowners assume there is no way to avoid paying PMI insurance, but the new US Bank 80/10/10 program allows clients to avoid paying Private Mortgage Insurance (PMI) on their home purchase.
Here’s how it works:
The borrower puts a 10% Down Payment on the property. Next, they secure a 10% U.S. Bank Home Equity Line of Credit to use for home improvements or renovations to the property. And finally, they secure an 80% first mortgage with one of the many product options, including fixed rate and 5 and 10-year ARM loans, all with very competitive rates. With the US Bank 80/10/10 program, homeowners can avoid paying that dreaded PMI, which can add up to hundreds of dollars monthly on larger loans. Now, borrowers can use the money they would have been paying to PMI, to invest in things they really need like a new roof or a renovated basement. This program is available on loans up to $1.25 million.
Have questions? Please contact David Sampson, 401.345.2996, firstname.lastname@example.org. With over 15-years in the industry, David Sampson is an experienced Mortgage Loan Originator working with clients all over RI & MA. U.S. Bank is the 5th largest bank in the country and has recently opened an office in Rhode Island at 935 Jefferson Boulevard in Warwick.