The Secret to Buying a Home with Less Than 20% Down: A Guide to Home Buyer Expenses – Part 6

 

 

Are you ready to buy a home but struggling with the 20% down payment? Let’s talk about Private Mortgage Insurance, or PMI.

 

PMI is an extra insurance policy required by lenders for conventional home loans if your down payment is less than 20%. You pay the premiums, and it protects the lender if you default on your loan.

 

The cost of PMI typically ranges from one half to 1% of the loan amount annually. For example, on a $800,000 loan, you could pay between $4,000 and $8,000 per year for private mortgage insurance.

 

You can avoid PMI by putting down 20%...but if that’s not possible, don't worry. PMI payments can be removed once you build up 20% equity in your home.

 

Other ways to avoid or reduce PMI include piggyback loans or opting for a government-guaranteed VA loan, if you are eligible.

 

While PMI is an additional cost, it can help you get into your dream home sooner because you don’t have to save up for the full 20% down payment on your new home.

Contact Me If You Are Looking:

 

• To Buy or Sell a Home in the Greater San Diego Area

• For Expert Property Management in Escondido California

• To Get Connected to a GREAT Real Estate Agent in Your Area

• To Learn more about information in this video

• To Collaborate on a project together

 

Erik Braceland 619-947-3560

San Diego Real Estate Broker | San Diego Real Estate Agent | San Diego REALTOR | San Diego Mortgage Broker 

California Licenses: DRE 02059069 NMLS 2064230

Braceland Homes, Inc.

Erik@BracelandHomes.com

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