What Is an Adjustable-Rate Mortgage?
Adjustable-rate mortgages have their own set of pros and cons. Learn what they are before you sign on the dotted line. Unlike a fixed-rate mortgage where the interest rate remains the same for the life of the loan, an adjustable-rate mortgage (ARM) has an interest rate that can increase or decrease several times during the mortgage term. ARM’s are riskier for the borrower, especially if interest rates take a significant uptick, but they are the right in many instances. Learn more about adjustable-rate mortgages and compare them to conventional fixed-rate mortgages before you start shopping for your dream home so that you go into the process with everything you need to know.
PMI Mortgage Insurance: Who Are The 7 U.S. Mortgage Insurers?
The 7 US mortgage insurers that provide private mortgage insurance (PMI) to lenders. Private mortgage insurance (PMI) insures the lender, not you when you buy a home with a down payment of less than 20 percent. It protects their interest in the event you default on your loan and is a requirement by lenders on loans provided to borrowers, with less than 20 percent as a down payment, toward the purchase of a home. So, essentially you are paying an insurer to protect the banks interest on your mortgage if your down payment is less than 20 percent because they are the ones taking the risk on your viability as a borrower.