4 Ways Private Mortgage Insurance Benefits Homeowners
Saving up a down payment for a home can be a challenge – particularly if you have to save up 20% of the purchase price. But with private mortgage insurance saving for a down payment becomes much easier since it allows the buyer to purchase their home with a down payment as small as 3%.
Here are four ways that private mortgage insurance can benefit the homeowner.
Own a home sooner
With real estate prices rapidly rising, the sooner that you can become a homeowner, the better. Saving up a down payment of 5% is of course much easier and can be done much faster than saving up a down payment of 20%.
If you were to save 5% of your income each year (based on an income of $93,000), it would take 11 years to save a 20% down payment on a $257,000 home. Compare that to only 3 years to save a 5% down payment if you have private mortgage insurance.
Increase home options
Since private home insurance allows you to dramatically reduce the amount of down payment that you need to save, it can also increase your options for the home you buy – allowing you to purchase a nicer home in a nicer neighbourhood than you might otherwise be able to afford.
Keep more of your savings
Since you don’t have to put as much money into your down payment, private mortgage insurance allows you to keep more of your hard-earned savings where it can accumulate interest for you in investments or where it can be used to pay for other expenses.
Take advantage of home appreciation
Finally, because you can purchase your home years earlier, private mortgage insurance allows you to take advantage of home appreciation. The sooner you purchase your new home, the sooner you will start building up home equity. This home equity can be used in the future for a variety of purposes ranging from debt consolidation to financing home improvement projects, to starting a business.
Contact 1Onefund Financial today!
Are you ready to become a homeowner? Contact us today. One of our agents would be happy to help you with your mortgage application and applying for private mortgage insurance.