How to Avoid Paying Private Mortgage Insurance
Many people get frustrated with the payment of a considerable amount every month for private mortgage insurance also known as PMI. It usually takes hundreds of dollars and everyone cannot afford this amount. There are a large number of people who are helpless in this matter simply because they do not know how to avoid paying private mortgage insurance. However, there are number of ways which can help you to avoid paying for private mortgage insurance. Keep reading this article to learn different tricks which will help you to know how to avoid paying private mortgage insurance.
Instructions
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1
First of all, you should know all details about private mortgage insurance and its ratio. Calculate how much money you will be paying on a monthly basis.
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The main purpose of private mortgage insurance is to protect the bank from any sort of default on mortgage. So, you have to pay a fixed amount every month in the form of private mortgage insurance fee. But you can avoid paying this money by taking advice from a qualified attorney.
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Make sure you consult with a qualified lawyer who has expertise in all types of insurance policies as he will help you in finding out ways to avoid paying for private mortgage insurance.
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Usually those people pay private mortgage insurance who have taken loan on mortgage without paying the minimum amount as down payment. You should make the down payment of at least 20% amount of the total property value which will help you to avoid paying private mortgage insurance.
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You can also utilise the 80/20 combo loan option in which the first mortgage value is calculated 80$ percent of your property’s value and second mortgage will be 20% of property’s value. Considering that you have fulfilled the requirement of 80% rule for private mortgage insurance you do not need to pay for the private mortgage insurance.
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In some cases the lender pays for the private mortgage insurance. You should consult with the lawyer in this regard and find out way how you can take benefit from this rule in your case. It will help you to avoid paying for private mortgage insurance.
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However, for making your lender to pay for the private mortgage insurance, you need to have a good credit history and there should not be any default on your part.
