• About Us
  • Privacy Policy
  • Contact
Mortgage Insurance Center
  • Home
  • Mortgages
  • Health Insurance
  • Home Insurance
  • Life insuranace
  • Finance Laws
    • Banking Laws
    • Assets
    • Interest Rate
    • Loans
No Result
View All Result
  • Home
  • Mortgages
  • Health Insurance
  • Home Insurance
  • Life insuranace
  • Finance Laws
    • Banking Laws
    • Assets
    • Interest Rate
    • Loans
No Result
View All Result
Mortgage Insurance Center
No Result
View All Result
Home Mortgages

Paying PMI? Here’s How to Remove the Monthly Mortgage Expense

by Matthew Upton
June 6, 2022
in Mortgages
0
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter
[ad_1]
The buyer is signing a contract for business rental, mortgage purchase, or home insurance in front of a real estate agent.

Lucky7trader / Getty Images/iStockphoto

Homebuyers are putting less money down than ever before for their mortgages, the National Associations of Realtors discovered in 2021. While it’s recommended to put 20% down for a conventional mortgage, you can obtain a mortgage with as little as 3% down. And many homebuyers are taking advantage of these programs.

See: In Less Than a Decade, You Won’t Be Able To Afford a Home in These Cities
Find: What Is Mortgage Insurance and How Does It Work?

NAR research, published in the 2021 Home Buyers and Sellers Generational Trends Report, showed that the average buyer puts just 12% down. Homebuyers under age 30 put down an average of just 6%.

That could be because 25% of buyers in this age group said that saving for a down payment was the most difficult step in buying a house. Student loan debt was a big obstacle in trying to save for a home, with 43% of buyers ages 22 to 30 saddled with debt.

While securing a loan with less than 20% down is one way to make your dream of homeownership a reality, it does come with one drawback: You’ll have to pay something called PMI, or Private Mortgage Insurance, to your lender.

PMI typically costs anywhere from 0.2% to 2% of the total loan, says Experian, but costs vary depending on your credit score, the loan-to-value ratio of the home and your insurance provider.

PMI protects the lender if you fail to make your mortgage payments.

But you’re not doomed to pay PMI for the life of the loan. Finance experts point out several ways you can remove the PMI payments from your mortgage.

First, your PMI will automatically drop off your mortgage payments once you’ve paid 22% of your home’s appraised value. Once you’ve paid off roughly 20%, however, you can call your lender and ask them to remove PMI. You could save a few thousand dollars with a simple phone call to cancel PMI before you hit that 22% mark in home equity.

Another way to remove PMI is to have your home reappraised. The NAR reports that home prices, nationwide, rose an average of nearly 17% between December 2020 and December 2021, and are continuing to rise in 2022.

If you purchased a home for $300,000 in 2020 and put 10% down, your initial home loan was for $270,000. But if your home is now worth $345,000 — a 15% increase — you’ve reduced your loan to value ratio to hit that magic 20% number in home equity.

CNBC finance experts warn that reappraisals do have associated costs, so you’ll want to consider how much you’ll save doing so.

Alternatively, you can eliminate PMI by refinancing your home loan. This will come with an appraisal that will determine your home’s value today. However, with interest rates rapidly rising, a re-fi may not be the best choice, unless your credit score and finances have improved since you bought your home, and you can qualify for a lower interest rate in today’s market.

POLL: Do You Think You Will Be Able To Retire at Age 65?
Discover: The Best Cities To Retire on $2,000 a Month

Again, run the numbers to see if refinancing makes sense in your situation to save money.

More From GOBankingRates

About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.


[ad_2]
Source link
Previous Post

You can’t get through this life alone: A Q&A with Tammera Hollerich

Next Post

Initiative to cap interest rates for payday loans submits signatures for Michigan ballot – Ballotpedia News

Next Post
Initiative to cap interest rates for payday loans submits signatures for Michigan ballot – Ballotpedia News

Initiative to cap interest rates for payday loans submits signatures for Michigan ballot – Ballotpedia News

Popular Posts

Ajanta Pharma : Newspaper Advertisements
Life insuranace

Taiming Assurance Broker : Announcement on behalf of the major subsidiary Link-Aim Life Insurance Broker Co.,LTD. to distribute dividends.

by Matthew Upton
July 28, 2022
0

Close Provided by: TAIMING ASSURANCE BROKER CO.,LTD. SEQ_NO 4 Date of...

Read more

Taiming Assurance Broker : Announcement on behalf of the major subsidiary Link-Aim Life Insurance Broker Co.,LTD. to distribute dividends.

20% interest rate on credit cards! Here’s how to avoid paying those high rates :: WRAL.com

Sens. Murphy, Blumenthal, Colleagues Reintroduce the Behavioral Health Coverage Transparency Act – InsuranceNewsNet

$1 billion in loans still available for agricultural funding in Ohio

How Long Do Car Accidents Stay on Your Record?

Rocket Mortgage Classic Wagers: Pick To Finish Top-10

Load More

Popular Posts

Hingham DPW Workers Deserve Respect, Decent Wages and Affordable Health Insurance

Hingham DPW Workers Deserve Respect, Decent Wages and Affordable Health Insurance

by Matthew Upton
July 5, 2022
0

Propy introduces blockchain title and escrow service

Propy introduces blockchain title and escrow service

by Matthew Upton
May 26, 2022
0

Biden administration sued after fertility awareness methods cut from health coverage

by Matthew Upton
June 15, 2022
0

Ajanta Pharma : Newspaper Advertisements

Taiming Assurance Broker : Announcement on behalf of the major subsidiary Link-Aim Life Insurance Broker Co.,LTD. to distribute dividends.

July 28, 2022

20% interest rate on credit cards! Here’s how to avoid paying those high rates :: WRAL.com

July 28, 2022
Edelweiss General Insurance launches India’s first on-demand, mobile telematics-based comprehensive motor insurance – SWITCH

Sens. Murphy, Blumenthal, Colleagues Reintroduce the Behavioral Health Coverage Transparency Act – InsuranceNewsNet

July 28, 2022

Categories

  • Assets
  • Banking Laws
  • Finance Laws
  • Health Insurance
  • Home Insurance
  • Interest Rate
  • Life insuranace
  • Loans
  • Mortgages

Tags

home loans mortgage personal loan
  • Privacy Policy
  • contact us

© 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.

No Result
View All Result
  • About Us
  • contact us
  • Home
  • Home 2
  • Home 3
  • Privacy Policy

© 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.