October 6, 2022 | Sexton Real Estate Group
As a homeowner, you know that your home is one of your biggest investments. And, like any investment, you want to protect it. That’s where PMI insurance comes in.
PMI insurance is a type of mortgage insurance that protects lenders from losses if a borrower defaults on their home loan. It’s required by most lenders if you’re putting less than 20% down on a home.
While PMI insurance may seem like an added expense, it can save you money in the long run. Here are three benefits of PMI insurance for homeowners:
PMI Insurance Protects Your Home Equity
Defaulting on your home loan can be a nightmare. Not only will you lose your home, but your credit will be damaged, making it difficult to get another loan in the future. And, if your home is sold for less than the outstanding balance of your loan, you’ll be responsible for the difference. That’s where PMI insurance comes in. If you have PMI insurance and default on your loan, the insurer will pay your lender the outstanding balance of your loan, up to the policy limit. This protects your home equity and gives you peace of mind knowing that your investment is protected. So, if you’re considering buying a home, be sure to ask about PMI insurance. It could be the difference between losing everything and keeping your dream alive.
PMI Insurance Can Save You Money
While PMI insurance may seem like an added expense, it can save you money. How? PMI insurance can help you qualify for a lower interest rate on your home loan. And, because your loan balance will be reduced by the amount of the insurance payout if you default, your monthly payments will be lower. So, in the long run, PMI insurance could save you money. Of course, you’ll need to weigh the cost of the insurance against the potential savings. But if you’re considering a home loan, it’s worth getting some quotes and doing the math to see if PMI insurance makes sense for you.
PMI Insurance Offers Flexibility
PMI insurance offers flexibility that other types of insurance don’t. For example, you can cancel your PMI insurance when you reach 20% equity in your home. And, if you refinance your home loan, you may be able to get rid of PMI insurance altogether. So, if you’re looking for an insurance policy that offers flexibility, PMI insurance is worth considering. PMI insurance can be a great way to protect your investment in your home, and the flexibility it offers can be very beneficial. If you’re thinking about buying a home or refinancing your current home loan, be sure to ask about PMI insurance and whether it’s right for you.
PMI Insurance Is Tax-Deductible
As a homeowner, you’re responsible for a lot of different expenses – property taxes, repairs, and maintenance, just to name a few. So it’s always nice to find a way to save money, especially when it comes to something as important as your home. That’s why it’s worth knowing that PMI insurance is tax-deductible. If you itemize your deductions, you can deduct the cost of your PMI insurance on your taxes. This can save you money come tax time, which is always a welcomed bonus.
PMI Insurance Gives You Peace Of Mind
Most importantly, PMI insurance gives you peace of mind. Knowing that your home is protected if something happens and you can’t make your payments is a huge weight off your shoulders. And, if you do default on your loan, the insurer will pay your lender the outstanding balance of your loan, up to the policy limit. So you can rest assured knowing that your home is protected and you won’t be left with a huge debt if something happens.
PMI insurance is a great way to protect your investment in your home. If you’re considering buying a home or refinancing your current home loan, be sure to ask about PMI insurance and whether it’s right for you. It could save you money in the long run and give you peace of mind knowing that your home is protected.
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