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HOLIDAY NOTICE: All Franklin Savings Bank offices will be closed on Wednesday, December 25th for Christmas. Online and Mobile banking services are available 24/7 so you can bank whenever you want, from wherever you are. Click here to learn more.

NOTICE: Due to inclement weather, all Franklin Savings Bank locations will be closed on Thursday, April 4th. Feel free to check back here, or on our Facebook and Instagram pages, for udpates. Our Online and Mobile Banking services are available 24/7 so you can bank anytime.

NOTICE: Beginning April 8th, our Central Street entrance at our Main Office in Franklin will be temporarily inaccessible. Our parking lot entrance and lobby will remain open. We invite you to use the ATM machine at our 933 Central Street, Franklin location. Or you may access cash from over 55,000 fee-free ATMs using the Allpoint Network. The Allpoint app is available for download in the Apple or Google Play Stores. https://www.fsbnh.bank/personal-banking/allpoint-atms/ 

Buying a home? Here’s what you need to know about PMI insurance.

You found the perfect home but you don’t have 20% to put down for a deposit. Are you out of luck?

Not necessarily. People buy homes every day without a 20% deposit, but they may need to take a few extra steps to make their dream a reality. Purchasing Private Mortgage Insurance (PMI) is one of them.

So what is PMI exactly? You’ve probably heard the term thrown around the water cooler of friends and co-workers embarking on their home ownership journey, but do you know what it is or if you need it?

Here are the basics:

  • PMI is insurance on a conventional loan that is usually applied when the borrower has less than a 20% down payment on the purchase price of their home.
  • PMI protects the lender (not the buyer) in the event that the buyer is no longer able to afford their mortgage payments and forecloses on their home.
  • PMI is usually added to the buyer’s monthly mortgage payment, but other arrangements can be made. Some buyers prefer to pay the PMI up front so that their mortgage payment is lower. Others will pay for some of the PMI up front, and add the rest to their monthly mortgage payment. You can ask your lender what options are available.
  • When the buyer has reached an 80% loan to value (LTV) ratio on their home, the PMI is no longer needed.
  • Typical PMI ranges from 0.5% – 2.25% of your loan balance per year.

The biggest advantage to PMI is that an individual may have the opportunity to become a homeowner sooner, because a 20% down payment is not required. On the flip side, they pay for that advantage with the PMI fee. Individuals should evaluate for themselves whether the cost of PMI outweighs the cost of waiting to purchase a home.

Will the extra PMI fee be on your mortgage bill forever? Nope! The PMI fee will drop off of the buyers monthly mortgage bill once they have reached an 80% loan to value ratio on their home, up to 11 years. To reach the 80% LTV sooner, a buyer can try refinancing or making additional payments toward their principal.

Several different PMI types and programs are available for potential homeowners to explore. We encourage you to contact your local Franklin Savings Bank lender to talk about how we can reach your goals for home ownership.

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