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Consider the PMI Impact
05/15/24
Lenders require Private Mortgage Insurance (PMI) when a borrower puts down less than 20% on a home loan. If your principal balance is relatively low and you are thinking about refinancing your mortgage you need to consider whether the new loan will require PMI. (On a $200,000 mortgage, PMI will cost approximately $140 a month.) If that is the case, consider a home equity loan instead. Second mortgages do not impact PMI calculations. As long as the balance of your first mortgage is less than 80% of the appraised value of your home, you won’t have to pay PMI.
Even if you don’t plan to refinance, keep in mind you can petition your lender to cancel PMI when your mortgage balance is less than 80% of the appraisal value; if that is the case, contact your lender today.
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This article contains general information only. Sunflower Bank, N.A. is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. It is not meant as a substitute for such professional advice or services. Before making any decisions related to these matters, you should consult a qualified professional advisor. Investment and insurance products are not FDIC-insured, are not a deposit or other obligation of, or guaranteed by the bank or an affiliate of the bank, are not insured by any federal government agency and are subject to investment risks, including possible loss of the principal amount invested.