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What is PMI And How to Avoid It
Manage episode 389690683 series 3486868
Real Estate Financial Planner LLC and James Orr and James Orr द्वारा प्रदान की गई सामग्री. एपिसोड, ग्राफिक्स और पॉडकास्ट विवरण सहित सभी पॉडकास्ट सामग्री Real Estate Financial Planner LLC and James Orr and James Orr या उनके पॉडकास्ट प्लेटफ़ॉर्म पार्टनर द्वारा सीधे अपलोड और प्रदान की जाती है। यदि आपको लगता है कि कोई आपकी अनुमति के बिना आपके कॉपीराइट किए गए कार्य का उपयोग कर रहा है, तो आप यहां बताई गई प्रक्रिया का पालन कर सकते हैं https://hi.player.fm/legal।
What is PMI And How to Avoid It
You want to work with a lender so that you don't need to purchase a property with all cash. The lender is willing to lend you money, charging you interest to make a profit, and ensuring there is a safety buffer of equity in case you default and they need to foreclose to recover their funds.
Your goal is to minimize the amount you need to invest in the deal to maximize your return on investment, but the lender requires a minimum down payment of 20% to feel secure in loaning you the money in case you default and they need to foreclose to recover the property and their money.
You insist on putting down less than 20%.
Reluctantly, they agree to let you put less than 20% down, but only if you purchase third-party insurance to protect them in case of default. You agree.
The third-party insurance company is offering private mortgage insurance (PMI), which is insurance you pay to protect the lender in case you default because you put down less than 20%.
In this mini-class, we will look at PMI, what it is, and how you can avoid it as a real estate investor.
Check out the video from this class here:
What is PMI And How to Avoid It - Video
In this class, James discusses:
- What is Private Mortgage Insurance (PMI) and why does it exist?
- What is PMI called for FHA loans?
- How to avoid paying PMI?
- Putting at least 20% down to avoid paying PMI
- Paying down on your loan to get rid of PMI
- Opting to take a higher mortgage interest rate instead of PMI
- Get a loan that doesn't have PMI at all
- Utilize the creative financing strategies that don't have PMI
- Plus much more...
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