Get All the Facts about PMI

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase a home with a down payment below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 6%, while repeat buyers put down 14% (no doubt aided by the sale of their home). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and to help you make the best decision for you and your family.  Give me a call – J.P. Cook – 602-320-4253.

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6223 N 12th Street Phoenix, AZ 85014

$499,000

2 Beds

2.5 Baths

1,461 SqFt

Status Active

MLS # 6627392

Property Type Townhouse

Price Type --

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4122 S 185th Lane Goodyear, AZ 85338

$499,000

3 Beds

2.5 Baths

2,688 SqFt

Status Active

MLS # 6631109

Property Type Single Family Residence

Price Type --

Rates are too high client is willing to help with a 2/1 buy down. Ask your agent for details. This beautiful home check a lot of boxes. Owned solar panels, home over 2600 square feet, , wood flooring throughout. This beautiful home is made to entertain with the gourmet kitchen with open sight lines into the living room. Large walk-in closets and convenient upstairs laundry.

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10838 W Reef Circle Arizona City, AZ 85123

$499,000

5 Beds

3 Baths

3,995 SqFt

Status Active

MLS # 6632698

Property Type Single Family Residence

Price Type --

Remarkable custom-built Lakefront home with panoramic views! Nestled on a cul-de-sac offering 5 beds, 3 baths, and a 3-car garage. You'll love the fabulous interior showcasing a welcoming living & dining room combo and an inviting family room paired with a fireplace & media niche, that seamlessly connects to the kitchen. Entertainment-ready, this gem provides surround sound & a wet bar! Abundant natural light, 10ft ceilings, excellent stairway banister, two-tone paint, & tasteful flooring enhance the overall ambiance. The large kitchen boasts built-in appliances, granite counters & backsplash, recessed lighting, a built-in desk, wood cabinetry, and an island w/breakfast bar. One bedroom downstairs! Head upstairs to find a cozy loft & 4 bedrooms. Grand main bedroom will surely impress you! Featuring a media center w/fireplace, wet bar, balcony access, and a sitting room that can be an office as well. Its ensuite includes dual vanities, jetted tub, snail shower, & a walk-in closet. Laundry room with attached cabinetry & sink for your convenience. Outside, your fantastic retreat awaits in the backyard! Natural grass, covered patio, and space for enjoying BBQ complete the picture. PLUS! Take advantage of the private boat dock for your water adventures. This value won't disappoint!

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6081 W Estancia Way Florence, AZ 85132

$499,000

4 Beds

2.5 Baths

3,737 SqFt

Status Active

MLS # 6636271

Property Type Single Family Residence

Price Type --

This home has many features you have never seen at this price point. There is an elevator from the living room to the loft for those who struggle with stairs. Yard has a gorgeous heat pump heated pool, patio with custom finishes, lots of LED lighting. A true place to relax and unwind. The house itself has all hard flooring. Fabulous kitchen with SS appliances, gas cook top, granite, island, pot rack. Great room plus formal living room/dining room. Den on 1st floor. Huge laundry room. Lots of storage. Beautiful loft area. All bedrooms have walk-in closets and master has an attached bath and 2 huge walk-in closets. 3 car garage has a mini-split and very upgraded electrical. And all in the resort community of Anthem at Merrill Ranch. Amenities galore.

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5104 N 32nd Street Phoenix, AZ 85018

$499,000

2 Beds

2 Baths

1,277 SqFt

Status Active

MLS # 6639426

Property Type Apartment

Price Type --

Stunning fully remodeled condo in the heart of the Biltmore Corridor. Light & bright two bedroom/two bath north facing single-level split floor plan condo in the much sought after Meridian Condominiums, a part of the Arizona Biltmore Estates Village. Turn-key & move-in ready as a winter getaway or a full time residence. The gated community provides elevator access, underground garage reserved parking, a year-round heated resort-style pool, jacuzzi spa, gas BBQ grills, fitness room, sauna/locker rooms & plenty of green space. Walk thru private security gate to access adjacent restaurants and shopping.

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3199 N Desert Horizons Lane Casa Grande, AZ 85122

$499,000

5 Beds

3 Baths

3,554 SqFt

Status Active

MLS # 6646010

Property Type Single Family Residence

Price Type --

Villago near the Lake, Discover this exquisite 5+ bed, 3-bath residence boasting a 2-car garage, extended driveway, and elegant brick veneers. The living room showcases high ceilings, a neutral palette, and sleek tile flooring. The family room provides a cozy setting for intimate moments. The formal dining room is perfect for hosting dinner parties. The kitchen comes with granite counters, cabinets with crown molding, SS appliances, recessed lighting, a walk-in pantry, a center island, and peninsula with a breakfast bar. The loft is ideal for a media room Master bedroom offers vaulted ceilings, plush carpeting, and an ensuite with dual sinks and a walk-in closet. The backyard is complete with a covered patio, low-maintenance turf, and a refreshing private pool. High speed for your office.

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2501 W Acoma Drive Phoenix, AZ 85023

$499,000

3 Beds

2 Baths

1,822 SqFt

Status Active

MLS # 6676528

Property Type Single Family Residence

Price Type --

**SELLER WILL CONSIDER A CREDIT FOR RATE BUY DOWN/CLOSING COSTS! Your search for a completely REMODELED house, with a POOL, in a great North Phoenix location with NO HOA is over! BONUS!*CRA incentive program available. Buyer to receive up to a $8741 credit to use towards rate buydown and/or closing costs(Buyer must qualify). This is the ONE and NOW is the TIME! Once you step into this light, bright, open concept floorplan with vaulted ceilings and updated EVERYTHING, you will want to stay forever! Kitchen features SS appliances, granite countertops, white Shaker cabinets, center island, pendulum lighting, recessed lighting, stone backsplash and overlooks the dining & family room w/ wood burning fireplace. The huge living room is the perfect place to unwind after a long day on yo oversized couch or host an epic gathering with friends and family. Down the hall you'll find the primary bedroom and 2 additional guest bedrooms. A trendy barn door separates the primary bedroom from the gorgeous primary bathroom which features dual sinks and a beautiful tiled shower w/ glass doors. The other 2 bedrooms are located right outside the updated hall bathroom making this entire floorplan extremely functional and very well laid out. The interior and exterior have been recently painted, front and backyard landscaping freshly done, new garage door installed and the HVAC, roof and water heater are in excellent condition and have been meticulously maintained.

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980 W Santa Fe Drive Wickenburg, AZ 85390

$499,000

3 Beds

2 Baths

2,056 SqFt

Status Active

MLS # 6651275

Property Type Single Family Residence

Price Type --

ENJOY THIS HOUSE ON A HILL w/ VIEWS of the Beautiful Bradshaw/Weaver Mountains*BACK COVERED PATIO w GAS bib for GRILL! Natural Light pours into the Bathrooms & almost every room from TUBULAR SKYLIGHTS! Several Mature Trees * RV Gate to the Large Fenced Backyard * Spacious 2,056 SF home on a quiet street * Large Foyer*Formal Living Room* Large Open Kitchen w Island *Custom Oak Cabinets * Cultured Marble Windowsills & Niches * Corner Sink w Outdoor Views * Breakfast Nook w/ Views to the North & East * Nice LG Refrigerator/Freezer * Cozy Gas Fireplace nestled in the Family Room*LARGE WALK IN CLOSETS*PRIMARY ENSUITE*TONS OF STORAGE SPACE* Full wall of Built-in Cabinets, UTILITY SINK & Work & Tool Station in Garage!

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15550 S 5th Avenue Phoenix, AZ 85045

$499,000

2 Beds

2 Baths

1,640 SqFt

Status Active

MLS # 6653163

Property Type Apartment

Price Type --

Unique ground floor unit. Freshly painted cabinets, doors, trim and walls. 12 ft ceilings, 8 ft doors, stainless steel appliances, kitchen island, wine cooler, granite countertops in kitchen and baths, separate tub/shower. Additional storage room next to bath 2. Master Suite has walk in closet and dual vanities, tiled shower and large tub. New AC System 2021. Refrigerator 2019. Microwave 2018. Wine Cooler 2017

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12925 W Seville Drive Sun City West, AZ 85375

$499,000

2 Beds

2 Baths

2,020 SqFt

Status Active

MLS # 6653221

Property Type Single Family Residence

Price Type --

Don't miss this recently renovated home. This exquisite 2-bed, 2-bath residence was renovated in 2022. The great room showcases vaulted ceilings, recessed lighting, plantation shutters, a striking mirrored wall that enhances the sense of space, and attractive wood-look flooring. The spacious kitchen with quartz counters, paneled cabinets with custom accents, chic pendant lighting, sleek SS appliances, a stylish tile backsplash, pantry, and a peninsula with a breakfast bar. You'll also find a versatile den ideal for an office. The main bedroom is complete with a make-up vanity, a walk-in closet, and a private bathroom with dual sinks. Recessed lighting throughout. Outside, the large covered patio offers a serene space for outdoor living.

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42616 W Kingfisher Drive Maricopa, AZ 85138

$499,000

4 Beds

3 Baths

1,821 SqFt

Status Active

MLS # 6654188

Property Type Single Family Residence

Price Type --

Unique Guest Casita (Unattached) and an Ideal Backyard that is Adjacent to Green Space. Province Amenities are Outstanding. Nearly $30,000 in recent upgrades (see document in tabs). This incredible 4 bed, 3 bath home now available! Discover a desirable open layout adorned w/tall ceilings, neutral paint, plantation shutters, tile flooring, & a warm fireplace. The kitchen is a homeowner's dream, fully equipped w/granite counters & backsplash, wood cabinets, an island w/a breakfast bar, & a breakfast nook w/a bay window. Retreat to the main suite, offering plush carpet, an ensuite w/dual sinks, walk-in closet, & private outdoor access. The backyard promises a tranquil spot for relaxation & year-round entertainment, w/a refreshing pool & a covered patio

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15958 W Shangri La Road Surprise, AZ 85379

$499,000

4 Beds

3 Baths

3,077 SqFt

Status Active

MLS # 6654011

Property Type Single Family Residence

Price Type --

This charming property offers comfort and practicality, featuring granite counters, oversize dark maple cabinets, 20' tile flooring, upgraded carpet, and stainless-steel appliances. The kitchen, overlooking the family room, creates a warm atmosphere for gatherings. A separate dining area and a generous living room provide ample space for everyday living. The master bedroom, complete with a sitting room and balcony, it's the perfect comfortable retreat. The backyard offers a refreshing pool, great for relaxation and outdoor enjoyment. Conveniently located close to schools, shopping, entertainment, and restaurants, this home provides accessibility without compromising comfort. Don't miss the opportunity to make this welcoming property your home sweet home

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