You have probably heard the popular idea that you need a 20% down payment in order to buy a home. But if you aren’t financially prepared to put 20% down, you’ve may have been introduced to alternative ways of buying a home that will allow you to pull together a smaller down payment, even 0% down.  It’s important to know what comes with other finance options, and specifically you should know about Private Mortgage Insurance (PMI). Here are three things you should know about PMI.

  1. What it is. Mortgage companies require PMI to mitigate their risk when accepting less than 20% down.
  2. How to cancel it. When you have at least 20% equity in your home, you can work with your mortgage professional to cancel your PMI, reducing your monthly expenses.
  3. It may be tax deductible. PMI payments could be tax deductible (which could save you hundreds of dollars a year.) Be sure to consult a tax professional about these benefits.

 

By Published On: October 26th, 2019

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