Still paying Private Mortgage Insurance? You may eligible to remove it!
Are you still paying private mortgage insurance (PMI)? You may be eligible to remove it!
What exactly is Private Mortgage Insurance (PMI)? PMI is added to your monthly mortgage payment when you put less than 20% down. The more money you put down, the lower your PMI payment will be. Don’t forget that credit also plays a role in this payment amount, so the numbers will vary slightly from one buyer to the next.
When considering how much to put down as a down payment, it’s import to weigh important factors that will have a direct impact to you and your family. Is there a sweet spot for a down payment?
It depends! Traditionally, 20% down was considered the only route to take as it avoided private mortgage insurance (PMI). However, there is now a different school of thought on this subject:
You can actually put down as little as 3%, 3.5%, or 5% down, but in our opinion, the sweet spot is somewhere between 10% and 15%.
Why put between 10% and 15% down?
A 10% or 15% down payment still leaves you some extra cash that can be used to furnish the home or cover additional move-in costs. More importantly, this range leaves you with equity growth in your home.
Can I eliminate PMI?
Yes! If you’ve put down less than 20% on your initial mortgage and your home has appreciated and has 20% equity, you can request to have it removed! When you believe (or your trusted Real Estate Consultant tells you!) you have 20% equity in your home, you can hire an appraiser to verify. This will cost around $500, but will be a worthwhile investment as your monthly mortgage payment will decrease!
How do I know if I have 20% equity in my home?
That is what we are here for! If you’re not already signed up for our monthly home equity analysis email, drop your address below.
If you are receiving our emails and want us to verify that 20% equity so you can have PMI removed, drop us a line below and we will run a CMA for you!