PMI is private mortgage insurance and all loans that don’t have at least 20% down are required to carry PMI. PMI is insurance that a lender puts in place to reduce the risk of the loan going into foreclosure. There is a monthly premium that is paid just like your homeowners insurance. The good news is that PMI allows many borrowers to qualify for a loan when they don’t have 20% to put down. In today’s economy it is hard to save that much money for many people. Each loan type, FHA, conventional and VA have some type of fee that is used to help lenders lend money without too much risk. The good news is that now PMI may be able to be deducted on your income taxes. Talk to a tax preparation specialist to find out if your PMI is deductible and stay tuned to this station for more information on loan types. Stay tuned to this station for more information on the best programs to use to purchase a home.
