PRIVATE MORTGAGE INSURANCE

What Is PMI?
PMI is extra insurance that lenders require for loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.

Benefits of PMI
PMI is an important ingredient to the lending process.  PMI protects a lender against losses if a borrower defaults on a loan - and it allows borrowers greater access to homeownership. It is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a larger down payment.

How much does mortgage insurance cost?
The cost of PMI is divided into two parts. The first part is a payment made at the time of closing. The second is an ongoing payment made each month with your principal and interest payment.

Do you offer any alternative to mortgage insurance?
You definitely have options; this is a good time to contact one of our professionals – for more information pertaining to your personal needs and goals.

Mortgage Insurance Alternatives
Lender Paid Mortgage Insurance Borrower Paid Mortgage Insurance
• Cost included in the interest rate
• Lower monthly payment
• Larger tax deduction
• Bigger savings over other mortgage insurance options

Best for those:
• Who are likely to move or refinance within ten years
• With a longer term mortgage
• Wanting to reduce monthly payments
• Needing a larger tax deduction 		• Premium added to monthly mortgage payment
• Higher monthly payment
• No tax deduction
• Option to cancel

Best for those:
• Who are likely to remain in their home without refinancing for more than ten years
• Making a down payment under 15 percent (or less than 15 percent equity if refinancing)
• With a shorter term mortgage
• Making a down payment over 15 percent (or at least 15 percent equity if refinancing)
• Willing to make higher monthly payments in exchange for the option to cancel down the road
• Expecting an increase in home value due to appreciation or home improvements

Linda Zaiss
VP/Mortgage Advisor

linda@rpm-mtg.com

Direct: 925.552.1185
Fax: 866.222.7674

License # 01238182
NMLS # 8991


30 W. Neal St. Suite 105, Pleasanton, CA 94566