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Private Mortgage Insurance and You

You may want to reconsider using private mortgage insurance to purchase Gulfport real estate because it poses many disadvantages that offset its value.
 
Private Mortgage Insurance Is Expensive to Maintain:

Private mortgage insurance is expensive to maintain because most lenders charge an additional $500 to $1,000 per year for each $100,000 you borrow. This extra payment can make purchasing a Gulfport home difficult because it can add as much as 15 percent to your monthly mortgage payment.
 
Private Mortgage Insurance Offers No Return On Your Purchase:

This is the case because your lender is allowed to keep any money you have paid for the insurance regardless of your ability to repay your mortgage on time. As a result, you could wind up wasting money that could be used for other financial needs.
 
Thankfully, there are several payment options that can help you avoid purchasing private mortgage insurance. Here’s brief overview of two of the most popular options that are available to Gulfport home buyers:
 
Pay Higher Interest Rates:

Many lenders will allow you to pay a higher interest rate in exchange for waving private mortgage insurance requirements. Using this arrangement can be worthwhile because you can often deduct the higher interest charges from your federal taxes.
 
Use a Second Mortgage to Purchase Your Home:

Some lenders offer dual mortgage programs that allow you to make a 5 to 10 percent down payment on a Gulfport home. These mortgage programs require you to take out a mortgage for 80 percent of the value of the home and another mortgage for the remaining value of the home that is not covered by your down payment.
 
Participating in these programs could be worthwhile because you could save money by paying a higher interest rate on a small portion of the value of your home instead of purchasing private mortgage insurance. 
 
To learn more details about these programs, please feel free to contact us today.

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