The Pierce Page

What is Private Mortgage Insurance? PMI

By Ellen Atwood

What is PMI?

PMI is for home buyers who wouldn’t typically be able to afford a large 20% down payment.

Private Mortgage Insurance (PMI) is insurance that protects your lender against non-payment if you default on your loan. Private mortgage insurance is to protect your lender, not you. As the buyer of this coverage, you’re paying the premiums so that your lender is protected.  PMI is often required by lenders due to the higher level of default risk that’s associated with low down payment loans.

The average costs of mortgage insurance premiums vary, but they usually are between .5% and 1% of the loan amount, depending on the size of the down payment. For example on a $200,000 loan with a $10,000 down payment, you can expect to pay somewhere around $85 a month. This amount is added to your monthly payment in addition to property taxes and home owners insurance. Continue Reading…

Do You Qualify for Downpayment Assistance from Pierce County?

Pierce County

If you are buying a home in Pierce County, and you meet certain qualifications, you may be able to receive money from Pierce County to use as the down payment on a house.

Here’s how it works:

A single mom with 2 kids (household of 3) wants to buy a house.  She makes good money, $45,000 a year, and found a townhouse for $150,000 that she would like to buy.  She is getting an FHA Loan, which requires a 3.5% down payment of $5250.  Since she meets the income guidelines from Pierce County, she would be able to get the $5250 as a loan, at 1%.  She would not have to pay back that loan until she sells her house.  

This is a GREAT resource for buyers, especially those buying their first home.  If you are buying a house in Pierce County and want to look into Downpayment Assistance check with your Mortgage Broker or visit the Pierce County Downpayment Assistance webpage.