Home sellers have lots of options when is time to sell their properties, however there is no magic formula that will guarantee in achieving the best and highest price possible for their homes. This is why I like to partner with my clients to guide them through the complexities of selling their homes. I assembled a team of true professionals with experience, dedication and strong communication skills to help ensure a successful and profitable sale of your home. 

 

Today I want to bring a very important point that relates to the sale of your home, Study Shows Home Prices  3 WaysTo Avoid Paying PMI When Buying a Home

 

What is PMI? 

For homebuyers who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy that protects the lender if you are unable to pay your mortgage.

This becomes a monthly payment that is added to your mortgage payment. 

Essentially, the more money a lender funds inside your mortgage, the greater the risk they will have on losing out on their investment. If the homeowner is unable to make their monthly mortgage payment, the PMI will protect and compensate the lender.

 

All lending institutions understand the usage of  PMI insurance policies to protect their risk when a home buyer puts less than 20% down payment.

 

Now, the question is: 

How can you avoid paying PMI and put LESS than 20% down payment? 

 

Good news, there are some scenarios where you can do this

 

Here are 3 Ways You Can Use To Avoid Paying PMI? 

 

#1 Look for a lender offering lender-paid mortgage insurance (LPMI), which eliminates PMI in exchange for a higher interest rate. Ask your real estate agent to provide you with a list of lenders who offer this type of programs. 

You must do your homework and ask yourself if paying a higher interest offsets the cost of paying PMI Insurance

 

#2 Buyers can opt for a piggyback mortgage — This type of loan uses a second loan to cover part of the down payment and reach 20%, therefore bypassing the PMI requirement.

You may avoid paying PMI insurance with this but, you will have to start paying for the second mortgage loan as soon as you take possession of the home. 

Again, you must do your homework. 

Paying the PMI or the second mortgage, which is better for you? 

 

#3  A way to avoid paying  PMI is, by looking for a loan program that doesn’t require it in the first place.

This is a little harder to find. There are lenders who may elect to bypass the PMI when they are also the ones funding the same loan. 

Ultimately, paying PMI is a decision you may want to do by consulting with your lender and real estate agent, 

 

One more thing, 

Many times, if you are looking to move up to a larger or more expensive home, you may take the equity you earn from the sale of your  house to put 20% down on your next home. With the equity gains that most homeowners have enjoyed in the last couple of years during a pandemic, it makes sense to take this opportunity and put those savings toward a larger down payment on your new home.

 

As always, I’m ready to have a quick consultation with you, when you are ready to make a move. 

 

There are many opportunities for growth in the current real estate market. To find out what’s right for your family, let’s get together to help you understand your options and guide you toward the best decision,

 

To purchase your dream home or a great foreclosure property, is about being educated, thorough and patient with the process. The most important aspect of finding the perfect home is working with a real estate agent who is highly skilled in negotiation and understanding of your expectations!  

 

For more information or assistance to help you find a home in the Las Vegas and Henderson area please call us at 702–845–8540