Private Mortgage Insurance, You Don't Want It.

Even though the buyer pays for it, Private Mortgage Insurance (PMI) is insurance for the lender, not the buyer. It is insurance for the lender in case the buyer defaults on the loan and it is needed in most cases when a down payment is less than 20%.

If you already have PMI you can apply with your lender to get rid of it if you think that through either paying down the priniple on your loan or through appreciation (or both) that you have reached 20% equity in your home. It is supposed to automatically drop off of your payment once it reaches 22% equity. But I would still call your lender and see how to go about asking them to take it off.

If you are going to purchase a new home and don't have 20% down, there are conventional loans for as little as 3% down that do not require PMI. The rate is slightly higher, but the savings you will make by not having PMI will far outweigh the small increase in your rate.

In other news, the Fort Collins/Loveland market, according to Core Logic, has appreciated 1.6% year over year in October. If you take out distressed sales, the market has appreciated 2.6%. That is some great news to take into the holidays!!

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Tags:

• PMI
• Private Mortgage Insurance
• Fort Collins Real Estate
• Appreciation in Fort Collins.