a mortgage offered by a lender who assumes all the risk of loss; typically requires a down payment of at least 20% of the value of the mortgaged property convertible ARM an adjustable-rate mortgage loan that allows borrowers to convert from an adjustable-rate to a fixed-rate loan, usually at any time between the 13th and the 60th month.
A down payment is the amount of cash you put toward the purchase of a home. It may be expressed as a percentage. For instance, it usually takes a 20 percent down payment to buy a home without private mortgage insurance. It may also be expressed as a dollar amount. As in, you have $15,000 available for a down payment.
fha concessions conventional loans vs government loans Along with the stripped-down underwriting, the new program also comes with valuable financial concessions. To sweeten the deal, the FHA has slashed its regular insurance premium charges for qualified.
To remove PMI, or private mortgage insurance, you must have at least 20 percent equity in the home. You may ask the lender to cancel PMI when you have paid down the mortgage balance to 80 percent of the home’s original appraised value. When the balance drops to 78 percent, the mortgage servicer is required to eliminate PMI.
Private Mortgage Insurance, or PMI, is an insurance policy. It pays the lender back when a loan goes into default. It is paid for by the homeowner but benefits the lender.
PMI, of course, is private mortgage insurance. It’s the monthly premium you pay if you can’t put at least 20 percent down on a home purchase or have at least 20 percent equity in a refinance. It doesn’t actually insure you, but compensates your lender in the event of default.
Equity Benchmark. You don’t need mortgage insurance when you refinance if you have at least 20 percent equity. This is the same as a mortgage loan-to-value ratio of 80 percent or less. You’ll need an appraisal to refinance. If you don’t have the required equity based on your purchase price, the appraisal may be high enough to qualify you anyway.
Private mortgage insurance is a monthly expense tacked onto mortgages for home purchases in which you made a down payment that was less than 20 percent of the home’s appraised value. Basically, PMI protects your lender in the event you default on your mortgage and the lender must sell your home.