The Cost of NOT Paying PMI

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Savings for down payment are often the first hurdles for the first time homebuyer because the average income, rent, and home prices vary depending on your living.
There is a common misconception among home buyers that a down payment of 20% is required, and this is a limited belief which often adds months to the home buying process, and sometimes adds years.

So, if you can purchase a home with less than a 20% down payment… why aren’t more people doing just that?
One Possible Answer: Private Mortgage Insurance (PMI)

Freddie Mac defines PMI as:
“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.
Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”
As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. The monthly cost of your PMI depends on the home’s value, the amount of your down payment, and your credit score.
Below is a table showing the difference in monthly mortgage payment for a $250,000 home with a 3% down payment and PMI vs. a 20% down payment without PMI:

For reading table and Complete blog click here: First Time Home Buyer

For more info visit here: Property Sellers North Carolina

Read Vantage Realty Professionals some new blogs:
Are Home Prices Softening or Are They Falling? | Property Sellers North Carolina
Should I Buy Now? Or Wait Until Next Year? [INFOGRAPHIC] | First Time Home Buyer
How Does the Supply of Homes for Sale Impact Buyer Demand? | Sell Your House Fast
Mortgage Interest Rates are Still Going Up… Should You Wait to Buy? | Keller Williams Charlotte

Thank,
Steve Muller

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