Midwest Financial Services, LLC

© 2009 Midwest Financial Services, LLC

Private Mortgage Insurance(PMI) is an insurance policy placed on a mortgage by lenders and banks when the Loan-To-Value is over 80%. This policy ensures the bank will receive full payoff in case of default by the borrower.

Advantages of a loan with PMI is that as of 2007, PMI is tax deductible Also, PMI allows buyers with little money for down payment to get into a home at a better rate.

Many lenders are now offering loans that do not have PMI. Usually the rate is higher than if the loan had PMI, but there are some advantages to going with a no-PMI loan.

More of the payment is tax deductible.(consult your tax professional)
Total payment may be lower.

May qualify for a more expensive home.

Here is an example of a loan with PMI and one that does not:

 

When inquiring about a loan, determine wether a loan with PMI is right for you or if you would prefer a loan without PMI. PMI will not insure buyers with less than a 680 credit score as of Apr, 2009.  For a PMI quote please click here