September 2, 2014
What is PMI when it comes to buying a home? How can you avoid paying it? Why should you?
What is PMI when it comes to buying a home? How can you avoid paying it? Why should you?
PMI is private mortgage insurance, you pay it when you can not put down the needed 20%. You can avoid paying it when you put down 20% or more on a down payment, It is unneeded and you never get the money back off of it, this only benefits the bank.
You are right on the mark, Garrett. PMI is required when you cannot come up with the 20% down payment on the home you are hoping to buy. What should you do if you don’t have the needed amount? I encourage you to wait until you have 20% rather than pay PMI. The other option would include the selection of a less expensive home. PMI is not your friend!