PMI Mortgage Insurance and the Physician Mortgage Loan Program.
WHAT IS PMI?
PMI (private mortgage insurance) is normally part of any mortgage loan if the buyer has less than 20% equity in the home. For those new to the home buying process, that means if you put less than 20% down on a house, you’ll pay a monthly premium for PMI. This additional cost for mortgage insurance protects the lender’s investment if you fall behind on your monthly payments and default on the loan. PMI initially costs upwards of 2% of the entire borrowed amount. This is paid in full at closing. Then up to 1% annually every year until the balance of the loan is down to 80%. Rates charge for PMI vary but not much based on the downpayment and program used to attain your loan. Here is what that means to you in terms of dollars- $250,000 home with zero down upfront PMI cost paid at closing would be $5,000 with $208 monthly premium included in your monthly mortgage payment. Oouch! that really starts to add up fast. You can find actual rates for PMI from MGIC here.
PHYSICIAN MORTGAGE AND PRIVATE MORTGAGE INSURANCE
Here’s the good news. Physician mortgages do not required the borrower to pay PMI.
Therefor saving you thousands of dollars per year and tens of thousands of dollars over the life of your loan.
Doctorloanprograms.com provides a comprehensive list of banks offering a Physician Loan Programs available in your State. Search here.