How PMI Affects Payments on Naples Mortgages

As Naples housing appreciation skyrockets, more and more prospective homebuyers find that they haven´t saved up enough money to pay a 20 percent down payment. Some buyers are willing to wait a little longer to save up the extra cash, but those dead set on buying now will have to pay private mortgage insurance (PMI) on their Naples mortgages.

PMI is coverage required by most Naples mortgage lenders "when the loan is more than 80 percent of the home´s purchase price." While the coverage protects lenders from Naples mortgage holders who default, it can tack over $1,000 annually to Naples mortgages.

PMI premiums are generally spread over the life of Naples mortgages until the loan balance drops to 80 percent of the property´s current market value. However, most lenders won´t stop payments automatically. They require that the Naples mortgage holder contact them to request cancellation. So homeowners who are not on top of their payments can end up paying much more than necessary.

To reduce costs further, prospective buyers should shop around for the best deal and keep in mind that "new, less expensive products are periodically introduced to the market."