091720 SWB DIGITAL EDITION

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0,00,20,40,60,81,04 | September 2020 | Southwest Orlando Home & Real EstateAre you considering buying ahome? Are you looking for a way tobuy without depleting your savings?If so, you should know there are waysto qualify for a mortgage soonerthan you think and for less. Insuredlow down payment mortgages areaffordable and safe loan optionsthat are offered by most lenders andhelp homebuyers achieve this goal.A low down payment mortgage withprivate mortgage insurance (PMI) inparticular is a great time-tested optionthat has helped more than 1.3million families qualify for a homesooner than they otherwise could.So, how does PMI work, and howmuch can it really save you?The 20% Down Payment MythIf you’ve been putting off buying ahome in order to save a 20% downpayment, there is good news: It isn’tnecessary. Surprised? You are notalone. While almost 80% of homebuyersthink a 20% down paymentis required, the fact is the averagefirst-time homebuyer who obtains amortgage puts just 6% down.ShopLocal.OrderLocal.SpendLocal.The futureof yourcommunitydependson yoursupport oflocalbusinesses,retailers andrestaurants.#ShopLocalThe Smarter Way to Buy a Home Homebuyers are taking advantage of historically low interest rates as well as average downpayments of just 6%.How is this possible? While thereare several low down paymentmortgage options available, conventionalloans with PMI have been borrowers’preferred loan choice for anumber of years. PMI is a smart wayto get into a home sooner, savingthe borrower time, and potentiallymoney, considering that home pricesmay move up over time, so waitingcould cost the borrower more in thelong run.How Does anInsured Mortgage Work?Private mortgage insurance canhelp a borrower with much lessthan a 20% down payment qualifyfor a home loan — with theaverage down payment being just6% in 2019 — and is typically paidmonthly along with the mortgagepayment. The benefit is not just thatthe borrower is able to qualify fora home sooner, but also that PMIis temporary. Unlike governmentinsuredmortgages backed by theFederal Housing Administration(FHA), PMI cancels after 20% equityis established, either throughpayments or home-price appreciation.When the PMI is canceled,your monthly mortgage bill goesdown.When to Buy a Home?The right time to purchase a homeis different for everyone, especiallynowadays. But as we adapt to achanging world, it is important toknow that PMI continues to helpborrowers achieve homeownership,and it is possible to benefit from historicallylow mortgage interest ratesand buy a house without exhaustingyour savings. In fact, a recentreport from U.S. Mortgage Insurersfound that PMI has helped morethan 33 million families becomehomeowners over the past 60-plusyears without putting down 20%.You can find how many people inyour state used PMI to purchasetheir homes in the last year by accessingthat same report. Interestrates are at an all-time low and millionsof people continue to achievethe dream of homeownership thanksto PMI.To learn more about how PMI comparesto other low down payment options,visit lowdownpaymentfacts.org.Esther Pelissier, ARPN-BC(BPT) ªEsther Pelissier
Southwest Orlando Home & Real Estate | September 2020 | 5
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091720 SWB DIGITAL EDITION

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