Dont Underestimate the Cost of Private Mortgage Insurance
According to a survey by TD Bank, approximately 65% of homeowners that have private mortgage insurance (PMI) state that the cost was higher than they had anticipated. It is essential that home buyers keep this in mind when budgeting and preparing to find their new home.
Michael Copely, the Executive Vice President of retail lending at TD Bank stated, PMI has had a definitive impact on many home buyers including making them rethink or delay the purchase of a home in light of not being able to meet monthly mortgage payments.
Remember that you must get PMI if the loan you take out is over 80% of the homes value. If homeowners default on their loan, the insurance protects the lender. This information frequently changes home buyers purchasing decisions. In fact, 53% of people surveyed said that they saw a negative impact because of the cost of PMI. Further, 37% of people who bought a home in the last 10 years reported that they were required to have private mortgage insurance. Additionally, according to the TD Bank study, the average cost of PMI to homeowners was placed at about $100.
The Wise Team works with amazing lenders that offer low down payment options and lender paid mortgage insurance. If you need assistance with understanding your options, or have any questions, reach out to them today by calling (714) 698-9473