No PMI = Private Mortgage Insurance
How to avoid paying PMI
Today most consumers are very much aware that paying PMI is not in there best interest and that paying PMI only protects the lender. So, to avoid paying PMI do not exceed borrowing more than 80% against the value of your home. Many lenders are now offering a new alturnitive to paying PMI by offering an 80/20 mortgage loan that will prevent the PMI costly charge. Be sure and ask your loan officer about this option as it could really save you thousands over the life of your loan. Another way to avoid paying PMI insurance is to put down 20% when you are purchasing a new home. Again, as long as your first mortgage falls below the 80% rule the lender will not require PMI insurance.
PMI stand for private mortgage insurance. It is insurance that protects the lender in the event you default on the loan. The only problem with this insurance is that you are required to pay the premium, not the lender. So when most consumers become aware of this they opt to not pay it and look for alternative loan programs that will eliminate this charge. Another disadvantage to paying PMI is the money you spend on this insurance is not tax deductible. When you pay against your mortgage monthly the interest you pay monthly is tax deductible, but not the PMI portion.
To find out how much you would have to pay if you took a loan that required PMI, use the following link http://www.pmigroup.com/lenders/pmirates.html. Try loan Online has lenders in its network that will help you advoid paying PMI which will save you thousands.