Why Wait to Buy? Do you want to buy a new home? Don’t have enough money to put twenty percent down? Don’t give up just yet. Having the twenty percent is good because so you can avoid paying mortgage insurance. Continue reading for more information on this topic. Also, if you are looking for a horse property for sale in Colorado, contact Colorado Horse Property today and speak with one of our horse-person realtors.
Why Wait to Buy Your First Home?
Except for VA loans, lenders require mortgage insurance when the loan-to-value ratio is greater than eighty percent. This is the ratio to how much the lender is giving you and how much the home is worth. The twenty percent down balances everything out. Therefore, if you are able to provide it then you will not be required to pay mortgage insurance. However, if you fear the costs of mortgage insurance, don’t give you just yet. Odds are you can still get the home of your dreams by finding the right balance between loan and mortgage insurance. Here’s how.
Imagine that you are purchasing your new home with a nine-five percent loan at the current low interest rates plus approximately eight-five dollars a month for mortgage insurance—this will greatly depend on your individual credit score. At the end of three years, the unpaid balance would be of a two hundred thousand dollar home would be about one hundred and seventy-nine thousand. Assuming the home will be worth the same two hundred thousand, the buyer’s equity would be almost forty thousand dollars. You might find that having a little bit of mortgage insurance to pay for is worth it in the long run to get the house you want now.
