Fit For You Financing: Private Mortgage Insurance
Attention all first-time homebuyers!
Private Mortgage Insurance – or PMI – lowers the lender’s risk, so buyers can qualify for a higher loan option. Typically, borrowers making a down payment of less than 20% of the purchase price will need to pay for PMI.
The amount of PMI depends on 3 things:
- Down payment value
- Credit rating
- Income
Once you have gained 20% equity, you may request to end PMI. PMI enables you to purchase a home with as little as 3% down for qualified buyers.
We recently closed on a home for a family in Willie and Willie's Kaden Creek neighborhood. The value of their home increased by $15,000 because as a new neighborhood builds out, home value typically rises. Once this home buyer gains 20% equity – the difference between home value and loan amount – they may request out of PMI.
A buyer may pay PMI upfront in a lump sum, monthly, or subscribe to lender-paid PMI. Contact me to review your PMI lending options.
