House keys hanging on a key hook with today's mortgage rate chart.
Save Thousands When Buying a Home
House keys hanging on a key hook with today's mortgage rate chart.

According to Freddie Mac, mortgage rates are rising again, with the 30-year fixed rate mortgage average jumping to 4.48% this week. But higher interest rates might pale in comparison to the extra cost you might pay if your home loan requires private mortgage insurance (PMI).

The PMI is a homeownership cost that surprises many first-time homebuyers; one that is easy to overlook in the excitement of going through the home buying process. For the unprepared homebuyer, the cost of paying PMI can be a real budget-buster, adding thousands of dollars in additional expenses each year.

Fortunately, with a little planning and knowledge, you can avoid paying PMI.

What is Private Mortgage Insurance (PMI)?

The purpose of private mortgage insurance is to protect the lender if you default on your mortgage. If you can’t put down a minimum 20% down payment on a conventional home loan, your lender will likely ask you to pay PMI.

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