Purchasing a home is exciting, but if you’re a first-time home buyer, you’re likely to encounter many unfamiliar terms and concepts. One of those is private mortgage insurance, or PMI. Many mortgage lenders require you to purchase PMI if your down payment is less than 20% of your home’s purchase price. PMI costs typically run between 0.5% and 1.75% of the financed amount and it can really add up: On a $100,000 loan, PMI could cost $1,750 a year.
PMI is arranged by your lender and provided by third party insurance companies. Other lenders will tell you that PMI can help you qualify for a loan you might not otherwise be able to get. What they often don’t share, however, is that PMI may increase the cost of your loan, as the most common way to pay for it is a monthly premium added into your mortgage payment. It won’t protect you if you run into problems paying your mortgage, either – it only protects the lender in case you default on your loan.
You likely already know that your SLFCU membership offers great benefits. But you may not know that we finance homes without PMI. By skipping this cost, members can potentially save thousands of dollars.
SLFCU offers home loan options that do not require a 20% down payment. In most markets, qualifying first time homebuyers only need a 3-5% down payment. Financing a home with us could result in a lower monthly mortgage payment and also save big dollars over the life of your loan.
The bottom line: an SLFCU home loan could help you purchase a home more quickly and save you money. If you are tired of paying PMI with another lender, SLFCU has programs to refinance your loan quickly, potentially reducing your monthly payment.
Whether you’re a first-time home buyer, have a growing family, need to downsize, or are looking to refinance, SLFCU has a home loan to meet your needs. You can start the no-obligation application process online, by phone, or in person at an SLFCU branch.
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