Avoid PMI - How You Can Avoid PMI With Less Than 20% Down
Everyone has been told to avoid PMI, or Private Mortgage Insurance.
PMI is a requirement by lenders if a borrower cannot come up with at least a 20% down payment on their home purchase.
Of course, PMI is not free.
The cost correlates to the amount of your loan balance, but can range anywhere from $50 to $300 per month.
Is there any way to avoid PMI? Well, there just may be.
It's called "Lender Paid Mortgage Insurance" LPMI, or Lender Paid Mortgage Insurance is an option in which the lender does not charge a higher interest rate (and thus a highly monthly mortgage payment) if the borrower does not have PMI.
To avoid P-M-I, a high down payment, the highly monthly payment and still keep your monthly within your budget, LPMI is a viable alternative.
Compare the two scenarios below: 1.
Home Mortgage Example including PMI * - Purchase Price = $200,000 * - Down Payment of 5% = $10,000 * - 30 year fixed rate at 5.
875% * - Total Monthly Mortgage Payment = $1247.
42 * - (Principal & Interest payment = $1123.
92, PMI payment = $123.
50) 2.
Home Mortgage Example excluding PMI * - Purchase Price = $200,000 * - Down Payment of 5% = $10,000 * - 30 year fixed rate at 6.
375% * - Total Monthly Mortgage Payment = $1185.
35 * - The scenario is which you avoid PMI is actually $62.
07 less every month.
When you look at this yearly, you are saving $744.
84 per year.
If you want to purchase a new home or refinance your existing mortgage without having a 20% down payment, do know that LMPI is one of several ways to avoid PMI.
This information is important to help you stop foreclosure, the first step in stopping foreclosure is to write a hardship letter, templates are excellent to help you.
PMI is a requirement by lenders if a borrower cannot come up with at least a 20% down payment on their home purchase.
Of course, PMI is not free.
The cost correlates to the amount of your loan balance, but can range anywhere from $50 to $300 per month.
Is there any way to avoid PMI? Well, there just may be.
It's called "Lender Paid Mortgage Insurance" LPMI, or Lender Paid Mortgage Insurance is an option in which the lender does not charge a higher interest rate (and thus a highly monthly mortgage payment) if the borrower does not have PMI.
To avoid P-M-I, a high down payment, the highly monthly payment and still keep your monthly within your budget, LPMI is a viable alternative.
Compare the two scenarios below: 1.
Home Mortgage Example including PMI * - Purchase Price = $200,000 * - Down Payment of 5% = $10,000 * - 30 year fixed rate at 5.
875% * - Total Monthly Mortgage Payment = $1247.
42 * - (Principal & Interest payment = $1123.
92, PMI payment = $123.
50) 2.
Home Mortgage Example excluding PMI * - Purchase Price = $200,000 * - Down Payment of 5% = $10,000 * - 30 year fixed rate at 6.
375% * - Total Monthly Mortgage Payment = $1185.
35 * - The scenario is which you avoid PMI is actually $62.
07 less every month.
When you look at this yearly, you are saving $744.
84 per year.
If you want to purchase a new home or refinance your existing mortgage without having a 20% down payment, do know that LMPI is one of several ways to avoid PMI.
This information is important to help you stop foreclosure, the first step in stopping foreclosure is to write a hardship letter, templates are excellent to help you.