What Is Private Mortgage Insurance?

If you put less than 20% down when purchasing a house, many lenders require you to buy Private Mortgage Insurance (PMI) to cover the remainder of the 20% and to guarantee your loan. Unfortunately, many people keep paying for PMI coverage they no longer need after they have acquired more than 20% equity in their home. The terms of your mortgage agreement may require that you obtain an appraisal to establish that you have reached the 20% equity mark before the PMI obligation is lifted.

However, you can avoid PMI and still put down less than 20% by purchasing a twoloan package. Some mortgage companies offer packages that work as follows: The first mortgage may be the traditional 30year fixedrate mortgage for 80% of the purchase price. The second mortgage could then be a 15year fixedrate second mortgage for the remainder of the purchase price (less your cash down payment). If you find a lender who allows you to do such a twoloan package you are putting your money into a mortgage instead of giving it away on PMI. In addition, unlike your PMI premium, your mortgage interest is tax deductible

Other Nebraska Insurance FAQs

Q: What Is An Agent?
A: An agent is a licensed representative of an insurance company who solicits, negotiates, or effects contracts of insurance and provides service to the policyholder for … More
Q: What Is An Application?
A: An application is a signed statement of facts requested by the insurance company on the basis of which the company decides whether or not to issue the coverage. The … More
Q: What Is An Assignment?
A: An assignment is the signed authorization by the policyholder for the insurance company to pay benefits directly to the hospital, doctor, or other provider.
Q: What Is A Beneficiary?
A: A beneficiary is the person designated or provided for by the policy terms to receive the proceeds upon the death of the insured.
Q: What Are Benefits?
A: Benefits are the dollar amount payable by the insurance company to the claimant, assignee, or beneficiary under the policy.
Q: What Is A Claim?
A: A claim is a demand to the insurance company for payment of benefits under the insurance contract.
Q: What Is Cobra?
A: COBRA is a federal law that regulates group health insurance. If you lose your job and you worked for an employer who has more than 20 employees, you may be able to … More
Q: Can I Be Denied Group Coverage In Nebraska?
A: Coverage under your group health plan (if your employer offers one) cannot be denied or limited, nor can you be required to pay more because of your health status. … More
Q: Can I Be Denied Group Coverage If I Am Sick At The Beginning Of The Coverage Period?
A: All group health plans in Nebraska must limit exclusion of preexisting conditions. There are rules about what counts as a preexisting condition and how long you must … More
Q: Can I Be Forced To Wait For My Group Coverage To Begin?
A: Yes. This is called the preenrollment period, usually between 3090 days. These waiting periods, however, cannot vary due to your health status. However, if … More