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If you are a higher-than-average risk borrower and put down less than 20%, you get hit with both a higher interest rate than average risk borrowers receive, and
by yourapostasy 11y ago
If you are a higher-than-average risk borrower and put down less than 20%, you get hit with both a higher interest rate than average risk borrowers receive, and you must pay mortgage insurance until you reach 20% equity. To add insult to injury, it is extremely common for the mortgage insurance companies and the mortgage servicing companies (not always the same) to simply keep charging borrowers the mortgage insurance fee even after the borrower reaches 20% equity.
- extra88 11y agoMortgage insurance payments end at 20% equity but you must ask for it to end. PMI automatically ends when you reach 22%. It also automatically ends if you are halfway through your mortgage schedule (e.g. 15 years for a 30 year mortgage), regardless of how much equity you have in the home. http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove-private-mortgage-pmi-insurance-from-my-loan.html http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove...