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Thank you so much
for all your help with purchasing our first home. We had no idea what to expect, and we are so thankful that Halo Group Mortgage made our loan process such an easy, stress-free process.
You did a great job. Thank you so much!
What is Private Mortgages Insurance?


Private Mortgage Insurance helps you get your loan.
Private Mortgage Insurance, also known as PMI, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non-government) companies and is usually required when your loan-to-value ratio - the amount of your mortgage loan divided by the value of your home - is greater than 80 percent.

PMI isn't a bad thing - it allows you to make a lower down payment and still qualify for a mortgage loan. In fact without PMI, many of us would not be able to purchase our first home. However, many choose rather to take out a second mortgage for the remaining 20 percent of the home's value to make their first lien 80 percent thereby avoiding PMI.

Taking out a second mortgage on your home used to carry some stigma with it - a sign that you were in financial trouble. But today, the ability to borrow money against your property is considered one of the biggest advantages of owning a home. A second mortgage is essentially a loan secured by your home or another piece of property with a first mortgage. Because there is more risk involved with a second mortgage, the lender's conditions are usually more stringent, the term is shorter and the interest rate is higher than for the first mortgage. In the event of default, the holder of the second mortgage is subordinate to the first.

How is PMI calculated?
Your PMI premium is fixed based on plan type (loan-to-value ratio, loan type, loan term, etc.) and is not related to your particular credit history or other individual characteristics. PMI typically amounts to about one-half of one percent of your mortgage amount annually, according to the Mortgage Bankers Association, and the premium payment is usually rolled into your monthly mortgage payment. On a $200,000 mortgage, you may be paying $1,000 per year for PMI.

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