Portal Forum General General Discussion Home Ownership Reply To: Home Ownership

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mjarz02mjarz02
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@Thomps wrote:

@MNNavy wrote:

@mjarz02 wrote:

IMO, the banks used the housing crisis to justify mortgage insurance.

That statement couldn’t be more wrong. I bought my first house in 1995 – well before the housing bubble/collapse. If I hadn’t borrowed on a VA loan, I would have been required to purchase PMI. My brother and his wife bought their first house in ’94, and they were required to purchase PMI, because they couldn’t afford to pay 20% down.

Agreed, mortgage insurance was around well before the crisis. It is used to protect the banks against a person defaulting when they didn’t have 20% down. Not having 20% down used to mean you were a higher risk candidate.

Yeah, I realize that PMI was around before the housing crisis. My comment should of been, the banks use the housing crisis to further justify PMI.

You make a person pay interest and you structure payments so interest is the majority of the payment initially. You also have an interest rate, which is based on a person’s credit. This is all done to protect banks and foster profit.

What is the need for PMI besides greed?