Saturday, March 19, 2011

Lower Your Mortgage Interest Rate With This Trick

If you own your own home, but paid less than 20% down, you may be able to effectively lower your interest rate if you haven't taken advantage of this one thing you may be able to do. To be able to get a mortgage with a very low down payment, you would need to get PMI.

What is PMI? PMI is Private Mortgage Insurance. This protects your lender in case you default on your loan to help your lender recoup expenses.

If you are paying PMI, and you currently have equity equal to 20% or more of the amount you borrowed, you should be able to stop paying Private Mortgage Insurance. You can then put the money you save towards the principle of your loan, and end up paying off your mortgage earlier.

Alternatively, you could spend that money someone else in your budget. After all, we can all use more money.

4 comments:

  1. Own a house and trying to move , I'll definitely have to keep this in mind.

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  2. Very nice trick! Followed! alphabetalife.blogspot.com

    ReplyDelete