If you don not have money for own flat or house it is not a surprise that you will go to the bank or to another lender in purpose to get a loan for such expansive purchasing. You must give many documents to get it and very often the lender ask to pay mortgage insurance because it minimized creditor's risk. Undoubtedly you should know what questions you may face with after you will have signed mortgage insurance agreement. Goerie.com stated five main things about private mortgage insurance and you should draw attention on them.
First at all you should know that lender usually requires PMI on the first stage of crediting when it gives you loan because the amount of loan is very big and it is huge risk for creditor.
Goerie.com stated
On a loan of $250,000, PMI may cost you $50 to $220 per month.
Thus you have splendid opportunity to make a rough calculation of your expenses on mortgage insurance. Goerie.com pointed out when you could ask to cancel PMI.
- When you pay 20 percent of your credit value you will have a right to ask to cancel PMI according to the country legislation. You will have such right if you have good credit history that is you make payments of loan and per cent of it in time;
- the lender automatically must cancel PMI when you pay 22 percent of your credit value and of course if you have good credit history;
- if you cannot cancel PMI in before mentioned cases but you have good credit history undoubtedly PMI will be canceled when you cancel your credit agreement before its term ends;
- Goerie.com emphasized
The PMI cancellation rules, as defined in the federal Homeowners Protection Act, apply to mortgage loans made since July 29, 1999. But they do not apply to loans made by the Federal Housing Administration or Department of Veterans Affairs.
Thus you will not be able to ask for PMI cancellation if your loan made by the Federal Housing Administration or Department of Veterans Affairs. Be careful! Do not forget this!Therefore if you are going to take a credit for flat or house do not forget before mentioned important things that you should know about mortgage insurance.