If you are not in a position to put the standard 20% down payment on the home you are purchasing you will likely need to factor in the cost of PMI (private mortgage insurance).
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐏𝐌𝐈?
Private mortgage insurance is a type of insurance that may be required by your mortgage lender if your down payment is less than 20 percent of your home’s purchase price. PMI protects the lender against losses if you default on your mortgage.
𝐖𝐡𝐨’𝐬 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐝 𝐭𝐨 𝐡𝐚𝐯𝐞 𝐏𝐌𝐈?
Homeowners who obtain a conventional loan and put down less than 20% of the homes purchase price.
𝐇𝐨𝐰 𝐦𝐮𝐜𝐡 𝐝𝐨𝐞𝐬 𝐏𝐌𝐈 𝐜𝐨𝐬𝐭?
This depends on a borrower’s credit score and down payment. A general rule of thumb is 0.3% to 1.5% of the original loan amount each year. PMI is an extra cost, on top of the interest you pay on your mortgage.
If you have any questions or would like to get in touch with one of my preferred lenders prior to us touring any homes, contact me to get the process started.