{"id":2232,"date":"2018-04-10T10:00:22","date_gmt":"2018-04-10T10:00:22","guid":{"rendered":"https:\/\/thezakariagroup.com\/what-is-private-mortgage-insurance-pmi\/"},"modified":"2018-04-10T10:00:22","modified_gmt":"2018-04-10T10:00:22","slug":"what-is-private-mortgage-insurance-pmi","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/what-is-private-mortgage-insurance-pmi\/","title":{"rendered":"What Is Private Mortgage Insurance (PMI)?"},"content":{"rendered":"
\n

\"What<\/p>\n

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have\u00a0too much information about\u00a0Private Mortgage Insurance (PMI).<\/span><\/p>\n

What is PMI?<\/strong><\/h4>\n

Freddie Mac\u00a0<\/em>defines<\/a> PMI as:<\/p>\n

\n

\u201cAn insurance policy that protects the lender if you are unable to pay your mortgage. It\u2019s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.<\/em><\/p>\n

Once you\u2019ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.\u201d<\/em><\/p>\n<\/blockquote>\n

\u00a0<\/em>As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary.\u00a0Freddie Mac\u00a0<\/em>goes on to explain that:<\/p>\n

\n

\u201cThe cost of PMI varies based on your loan-to-value ratio \u2013 the amount you owe on your mortgage compared to its value \u2013 and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.\u201d\u00a0<\/em><\/p>\n<\/blockquote>\n

According to the\u00a0National Association of Realtors,<\/em>\u00a0the average\u00a0down payment<\/a> for all buyers last year was 10%. For first-time buyers, that number dropped to 5%, while repeat buyers put down 14% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.<\/p>\n

Here\u2019s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:<\/p>\n

\"What<\/a><\/p>\n

The larger the down payment you can make, the lower your monthly housing cost will be, but\u00a0Freddie Mac\u00a0<\/em>urges you to remember:<\/p>\n

\n

\u201cIt\u2019s no doubt an added cost, but it\u2019s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.\u201d<\/em><\/p>\n<\/blockquote>\n

Bottom Line<\/strong><\/h3>\n

If you have questions about whether you should buy now or wait until you\u2019ve saved a larger down payment, let\u2019s get together to discuss our market\u2019s conditions and help you make the best decision for you and your family.<\/p>\n<\/div>\n

Powered by WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have\u00a0too much information about\u00a0Private Mortgage Insurance (PMI). What […]<\/p>\n","protected":false},"author":101010,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[98,99,101],"tags":[],"jetpack_publicize_connections":[],"yoast_head":"\nWhat Is Private Mortgage Insurance (PMI)? - The Zakaria Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thezakariagroup.com\/what-is-private-mortgage-insurance-pmi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is Private Mortgage Insurance (PMI)? - The Zakaria Group\" \/>\n<meta property=\"og:description\" content=\"When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. 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