Consider these questions:
- How does the amount of my down payment affect private mortgage insurance or PMI?
- How much do I have to put down to avoid paying PMI?
If you take out a loan to purchase a home, and your down payment is less than 20% of the home’s value, you will likely be required to pay for private mortgage insurance. These policies are usually required when the loan-to-value exceeds 80%. That’s the industry standard.
As to the second question:
- You may be able to avoid PMI by making a larger up-front investment. But, to be clear, a 20% down payment isn’t always necessary. Your real estate professional can provide you more information.
- Another advantage of making a larger down payment is that your monthly payment will be reduced. The more you pay up front, the less you are financing. This results in a smaller mortgage payment each month.
Bud Jones - Prescott Realtor wants you to be aware of how the down payment amount for your Prescott home purchase will affect the requirement for private mortgage insurance. You can trust the knowledge and experience of Bud Jones. After two decades of service as a Los Angeles County Deputy Sheriff, Bud began his 30-plus year real estate career, following in the footsteps of his mother whose vast experience and knowledge in the real estate industry played a monumental role in his training. Call Bud Jones at 928-710-0643 and experience the excellence in real estate services he provides. For more information, a free consultation, or to peruse the available properties in and around Prescott, visit http://www.budsellsprescotthomes.com.
