Crown Gaithersburg MD Single Family Homes | What is PMI?
Yes, you can find just about anywhere Million Dollar Homes in the Internet, but did you know that most real estate brokers and agents don’t really have all the tools needed to provide 100% assurance services to their clients that they are integrated fully with all the data on the MLS and beyond.
Yes, you can search on your own and hope that you are accessing all the luxury homes for sale at any given time...but in order for you to take advantage of all the data surrounding your real estate needs, You must seek the right services from the right broker. A professional that will provide value by customised innovation towards your real estate needs.
Today, I would like to talk to you about What is PMI?
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 about Private Mortgage Insurance (PMI).
What is 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:
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.”
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.
Below are some questions I want to ask you before your first step when looking for a home....
Do you have time to research the residential housing market?
Do you have the knowledge to integrate and understand the information available in the Internet?
Can you integrate the information available on the real estate Internet sites into useful data that can help you accomplish your goal of home ownership?
Do you have the expertise to negotiate on your own?
The answer to these questions will be key to the success of your home search
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The newest neighborhood “Crown” is located in the heart of Gaithersburg MD
Located steps away from Rio at the crossroads of I-270 and the Intercounty Connector.