Buying your first home is all at once a thrilling and overwhelming experience. With all the numbers, forms, and endless acronyms, it’s so easy for people to feel like they’ll never master it all. On top of that, factor in the costs of buying a home and the burden of monthly mortgage payments after the sale. Mortgage insurance is here to help ease your mind.
We’ve heard so many people tell us that they are concerned about what would happen to their home if they were unable to pay their monthly payments due to an accident or even death. Thankfully, we get the opportunity to reassure you in two ways: 1) you will always have someone to walk you through the homebuying process step-by-step, and 2) you can find lots of peace of mind with mortgage insurance. With a trusted partner and insurance to protect you, the process of buying a home will be just as exciting as you dreamed it would be.
Without Mortgage Insurance
If you choose to purchase a home without getting mortgage insurance, the pressure to pay your monthly mortgage payments is entirely on you, no matter what happens to you. Loss of job, sudden disability, or death are just some unfortunate events that can transpire, leaving your loved ones with the financial burden of your monthly payments.
Furthermore, if you choose to go without mortgage insurance, odds are that you won’t be approved for a loan if you are unable to provide a 20% down payment. The liability is simply too high. Without insurance, not being able to reach that big number could immediately disqualify you from the option of buying a home.
Well, enough of this depressing stuff. Let’s talk about a much better option.
With Mortgage Insurance
Private Mortgage Insurance, also known as PMI, is a type of mortgage insurance that is used with conventional loans. PMI protects you and the lender if you are unable to make payments on your home loan. It’s a small monthly cost that provides a safety net for unexpected financial trouble. If needed, it will be included with your monthly mortgage payment but won’t
contribute to the equity that you are building in your home.
If you invest in mortgage insurance, you are covered if any emergencies come up and you are unable to pay your mortgage. Now you can have that peace of mind that you’ve been looking for. It’s also a lifesaver for first-time home buyers who are unable to put down that full 20% down payment. By having mortgage insurance, you reduce the risk of investment for the lending company, and they’ll be much more willing and able to give you a loan. For this reason, PMI is required by law for anyone without at least a 20% down payment.
With PMI, you’ll be able to purchase your home sooner, and your buying capability will be expanded. Without the requirement of a 20% down payment, you’ll be able to afford much more than you would have otherwise. Plus, now that you don’t have to commit to putting a huge chunk down, you’ll have more money to pay off outstanding debt or put toward an emergency fund.
By now you should know that we strongly suggest getting Private Mortgage Insurance, no matter what financial situation you find yourself in. If it’s your first time buying a home, it may be a requirement, but it’s helpful to know just how important this insurance is, instead of it just being an extra monthly fee. PMI is valuable in many ways, and opens up all kinds of opportunity for you if you’re ready to purchase the home of your dreams.
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