Wednesday, November 28, 2018 / by Shaun Radcliffe
Shaun: Hi, Shaun Radcliffe with Radcliffe and Associates at Coldwell Banker, Global Luxury. And I'm here today with Glenn Hemry from the Hemry LaSalla Group at LoanDepot. And we wanted to talk about what is PMI?
Glenn: So, yeah that's a great question. We get that one all the time. So, PMI is Private Mortgage Insurance and that's something that, you know, we're not putting 20% down, 20% of the purchase price. This is something that we have to deal with at some level for the customer.
Shaun: And so, what would be a benefit to the borrower? Why would they incur PMI?
Glenn: So, benefit of...there's only really one benefit to PMI and that allows our clients to purchase a home without actually having 20% down.
Glenn: Once they're able to put 20% down then we can remove, you know, then they don't have to deal with that mortgage insurance.
Shaun: Okay and then so, what's a negative to PMI?
Glenn: So, negative of PMI would be it does incur an extra cost on the monthly payment. So, we do have to deal with it like I said at some level.
Glenn: However, there are other options that we do have, you know, depending on, you know, what kind of loan they're doing. If we're doing conventional financing then we do have some options where we can remove that mortgage insurance even if they're not putting 20% down.
Shaun: Okay, so, if I had PMI, how long does it stay on the loan?
Glenn: So, PMI usually lasts on the loan until you we can show that you have 20%. So, we may find that, you know, home values have gone up and we've got that 20%, we could do a refinance and get rid of the mortgage insurance that way or after a certain length of time if rates have gone up and it doesn't make sense to refinance, they can do an appraisal and with that 20% equity, the lender may look at removing that mortgage insurance for them.
Shaun: Okay so, I know that all of our clients that we share together go through an annual review and you look at PMI if they do have it. But what about for our viewers that are not with LoanDepot or not with your group.
How would they get rid of their PMI?
Glenn: So, that's something that I mean, we definitely see that a lot and we definitely want to, you know, take a look at those. So, any time that comes up, you know, we pull you in to see how can, you know, what's the value to property and here we are and then we kind of review the scenario with them and see if it makes sense. Sometimes, we find that it doesn't.
Shaun: Perfect! And how would people get a hold of you?
Glenn: So, you can reach me at 714-371-8782
Shaun: And of course, if you have any questions
about buying or selling real estate in today's market 714-497-0160 is the best number to reach me at.
Hey, thanks so much.
Glenn : Thanks so much Shaun.