The answer is NO!
Let's start with PMI (Private Mortgage Insurance) itself. What is it? PMI is insurance that protects the bank in the event you, the home buyer, forecloses or fails to make timely payments. PMI is an additional monthly add on that benefits the bank.
Most lenders now offer loan products with NO monthly PMI. This is typically called ‘LPMI’. Lender paid mortgage insurance. These loans are great for borrowers who want to put less than 20% down and do not want the monthly add on of PMI. This product is available with as little as 3% down BUT requires very strong credit scores.
Most borrowers today are looking at options with 5-10% down.
The PMI is still there in essence, it is just built into the interest rate versus a monthly PMI fee. For example you might put 10% down and take a rate of 4.5% 30 year fixed with a monthly PMI OR you could take a rate of 4.75% and NO monthly PMI.
While the interest rate is higher your overall monthly payment will be lower. Every customer is unique…so talk to your lender before making any decisions and have them run some break even analysis for you on the options. The loan size and your long term goals can impact which programs and products make the most sense for you!
For More Info. Related To Loans And Mortgage, feel free to contact a great local North Atlanta Mortgage Broker,
Max A Kallos -404-277-5884 cell / 678-298-8947 e-fax/ Profile Page