Frequently Asked Questions

What is PMI (Private Mortgage Insurance)?

If you make a down payment of less than 20% of the purchase price of the home, mortgage lenders generally require that you take out Private Mortgage Insurance (PMI) that protects the lender incase you default on your mortgage. You may need to pay up to a year’s worth of premium for this coverage at closing, which can amount to as much as several hundred dollars. One obvious way to avoid this extra cost is to make a 20% down payment. There are also other ways to eliminate PMI such as 80-10-10 financing which is further described in this section.

When should I refinance? | What are points? | Should I pay points to lower my interest rate? | What is an APR? | What does it mean to lock the interest rate? | What documents do I need to prepare for my loan application? | How is my credit judged by lenders? | What can I do to improve my credit score? | What is an Appraisal? | What is PMI (Private Mortgage Insurance) | What is 80-10-10 financing? | What happens at closing?