Have you heard the term Private Mortgage Insurance (PMI) when looking to finance real estate in Rehoboth Beach or elsewhere? You may be wondering what PMI is and how you know when you need to purchase it. These answers can be hard to find among all the real estate jargon you might be hearing lately.
Below is the short version of what you need to know.
What is Private Mortgage Insurance?
Private Mortgage Insurance is an insurance premium required by some lenders to offset the risk of a borrower defaulting on their home loan. When you put down less than 20 percent of the real estate's purchase price, the lender will generally require that PMI is added to the loan. It is usually added into the monthly mortgage payment until the equity position in the…