Will I Need PMI when I buy in Lancaster Co. , PA ?

By
Real Estate Agent with KW Elite
https://activerain.com/droplet/4XtB

You Can Never Have TMI about PMI

You Can Never Have TMI about PMI | MyKCM

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 a home with a down payment below 20%, you can never have Too Much Information (TMI) about Private Mortgage Insurance (PMI).

What is 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. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 6%, while repeat buyers put down 14% (no doubt aided by the sale of their home). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s 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:

You Can Never Have TMI about PMI | MyKCM

 

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It's no doubt an added cost, but it's enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and to help you make the best decision for you and your family.

Buyers, there are 3 ways to pay your PMI  . Email  mikeperrykw@gmail.com  to learn which method is right for you !

 

 
Posted by

 

Michael J. Perry

KELLER WILLIAMS Elite

www.lancaster4sale.com  

 

1280 Plaza Blvd. , Lancaster, PA 17601

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Longtime West Lampeter resident and Lancaster County Realtor!

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Topic:
Home Buying
Location:
Pennsylvania Lancaster County Lancaster West Lampeter Township
Groups:
1st Time Buyers
ABR-Accredited Buyer Representatives
Keller Williams
It's A Buyer's Market
Buyer Information - What Buyers Need to Know in Today's Market
Tags:
penn manor homes for sale
west lampeter real estate news
solanco real estate

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Rainmaker
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Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Michael J. Perry - What I liked best about this post is how you wrote the opening paragraph, "Whether it's your first or your fifth." The point you made well is that the market changes and you're there to guide whoever has a need most effectively. You truly are experienced and your expertise has spanned many years perfecting your profession. Even you know, education is important and you stay current. For that reason, I highly recommend anyone who needs to buy or sell to contact you.

Nov 16, 2016 10:18 PM #1
Rainmaker
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Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Lile the post Michael, love the you can never have TMI about PMI, catchy. Advising clients on their needs and what lies ahead is all part of our business.

Nov 16, 2016 11:44 PM #2
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Rainmaker
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Michael J. Perry

Lancaster, PA Relo Specialist
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