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An Overview of Private Mortgage Insurance

Posted on January 22, 2016

iStock_000018780863SmallIf this is your first time buying real estate in Destin, Florida, you may find yourself trying to figure out all of the different terminology. Among these terms, private mortgage insurance, more commonly referred to as PMI.

PMI is typically required if you put less than 20 percent down payment on a home. PMI fees vary depending on the size of of the down payment and the loan, which is usually around .3% to 1.15% of the original loan.

Sounds like a pretty heavy burden, huh? As it turns out, you can take out a second loan to cover 20 percent. This process is called “piggybacking,” which allows borrowers to deduct the interest on both loans come tax season.

Another option you have is to build equity in your home. You can do this through a combination of making extra payments or improvements to your home that increase its value.

Still have questions? Feel free to contact Brad Shoults today for more tips on how to buy a home.

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