Spring has sprung, and so has the housing market.
In just one month, the seasonally annual adjusted rate of sales of new-single family homes has increased 4 percent. Additionally, sales of homes in the $200,000 to $299,999 ranges increased 5 percent. The weather is finally shifting and more people are buying homes, but they are still struggling with the same issues in determining how to finance their home purchases.
For new homebuyers, it can be overwhelming trying to budget for the expenses involved in purchasing a home, especially if it’s their first. Then there is the added stress of allocating enough money to invest 20 percent in a down payment on the home of their dreams. Before making the purchase, it’s important to explore other options. …show more content…
PMI allows homebuyer’s to have more freedom in their purchase decisions and mimizes lender’s potential loses. With PMI, buyers can invest as low as 5 percent.
This modification in a buyer’s overall budget as a result of purchasing PMI can benefit them in a few ways.
Homebuyers can purchase a more expensive homes with less investment.
For $50,000, a homebuyer with PMI can purchase a home worth $500,000. With that same $50,000 down payment, a homebuyer with a conventional mortgage can only purchase a home worth $250,000. This allows homebuyers to buy larger houses or to purchase homes in more high demand locations.
Homebuyers can divest their saving into other opportunities.
PMI allows homebuyers to make a smaller percent down payment. Therefore, if a homebuyer who saved $25,000 for a down payment purchases PMI, they can make a 10 percent down payment, which would only utilize half of their allotted budget. That extra money can then be used for any other
In just one month, the seasonally annual adjusted rate of sales of new-single family homes has increased 4 percent. Additionally, sales of homes in the $200,000 to $299,999 ranges increased 5 percent. The weather is finally shifting and more people are buying homes, but they are still struggling with the same issues in determining how to finance their home purchases.
For new homebuyers, it can be overwhelming trying to budget for the expenses involved in purchasing a home, especially if it’s their first. Then there is the added stress of allocating enough money to invest 20 percent in a down payment on the home of their dreams. Before making the purchase, it’s important to explore other options. …show more content…
PMI allows homebuyer’s to have more freedom in their purchase decisions and mimizes lender’s potential loses. With PMI, buyers can invest as low as 5 percent.
This modification in a buyer’s overall budget as a result of purchasing PMI can benefit them in a few ways.
Homebuyers can purchase a more expensive homes with less investment.
For $50,000, a homebuyer with PMI can purchase a home worth $500,000. With that same $50,000 down payment, a homebuyer with a conventional mortgage can only purchase a home worth $250,000. This allows homebuyers to buy larger houses or to purchase homes in more high demand locations.
Homebuyers can divest their saving into other opportunities.
PMI allows homebuyers to make a smaller percent down payment. Therefore, if a homebuyer who saved $25,000 for a down payment purchases PMI, they can make a 10 percent down payment, which would only utilize half of their allotted budget. That extra money can then be used for any other