Fox Answers: Do I need PMI when buying a new house?
Ready to buy a new house? Find all you need to know about private mortgage insurance from Fox Communities Credit Union
Unless you’re a professional house flipper, buying a new house can be a long and confusing process if you don’t have an experienced and qualified partner like a mortgage specialist here at Fox Communities Credit Union to help you along. Not only are our Fox mortgage professionals friendly and always ready to help, but they’re also able to take the complicated house-buying process and simplify it down so that you understand everything that’s going on every step of the way. Take PMI, for instance. What is PMI? Do you need PMI? How do you pay for PMI if you do need it? Let’s find out the answers to those questions and more.
WHAT IS PMI?
Let’s start with the basics. PMI is Private Mortgage Insurance, which is used to protect lenders in case you’re unable to make your mortgage payments. But that doesn’t necessarily mean PMI is going to be required of you when buying your new house. In fact, you can avoid having to worry about – and pay for – PMI when setting up your mortgage, which will save you a lot of money in the long run.
HOW CAN I AVOID PAYING FOR PRIVATE MORTGAGE INSURANCE?
You can avoid paying PMI on most conventional mortgages if you’re able to make a down payment equal to 20 percent of the purchase price of your new home.
HOW DOES AVOIDING PMI SAVE ME MONEY IN THE LONG RUN?
Like any insurance, PMI has to be paid for – but how do you pay for your Private Mortgage Insurance if you need it? Well, there are a few ways. You can add a monthly premium onto your monthly mortgage payment, pay a single up-front premium at closing, or some combination of the two.
To learn more about mortgages and all the ways we can help here at Fox, please check out our daily mortgage rate sheet and Down Payment Plus program. You can also apply for a mortgage online or contact one of our friendly Fox team members to answer any and all of your questions.
Fox Communities Credit Union is a full-service, not-for-profit financial institution serving members throughout Eastern Wisconsin, including Appleton, Green Bay, Oshkosh, Manitowoc, and Milwaukee.