Published on Saturday, 16 January 2010
Although Private Mortgage Insurance (PMI) is used to protect the banks in case you default on payments, you can also use this to buy property or land without having to pay a hefty down payment. But how much do you have to pay for Private Mortgage Insurance Premium? Here are some factors that affect the premium of PMI. * Level of your credit history. If you've been faithful in paying loans and making credit card payments, your PMI premium or rate can be lower than others. * Amount of your down payment. Your PMI premium will be higher if you make a 5% down payment as opposed to a 10% down payment. * The area of the house or property you want to buy. If your house is located in an area that has the potential to appreciate, then your PMI rate or premium will be lower. Real estate and economic trends are factors in PMI rates. * Interest rate. Higher interest rates on your mortgage or loan equate to higher PMI rates or premiums. * Your loan type. Different loans can have different PMI premiums or rates. If the loan is riskier, then you get a higher PMI rate. Understanding Private Mortgage Insurance is important if you plan on buying a house or property. Remember that there are different factors that can affect PMI premium before you go for it.
