In this week’s Mortgage Minutes, Travis Evans from Academy Mortgage explains how you can avoid paying the private mortgage insurance (PMI) when you purchase a new home in Atlanta. Many buyers are unsure whether they will be required to have mortgage insurance when they have a lower down payment, but according to Academy Mortgage, there are ways to secure a low down payment without PMI.
One of the ways to avoid having to purchase PMI is to secure a second mortgage. Not only will this prevent a homebuyer from having PMI, but the buyer will have a low interest rate on the first conventional mortgage that will be combined with a second mortgage. This will allow the buyer to purchase in a higher price range while placing only five percent down.
There are many benefits to having a first and second mortgage instead of purchasing mortgage insurance. Not only are down payments lower, but the interest rates on each mortgage loan are tax deductible, while in some instances the mortgage insurance is not.
Another option available to Atlanta new home buyers is to purchase a home that includes a buyer’s incentive. Many home builders provide incentives on homes in lower price ranges if you use their preferred lender. So, whether the PMI is paid as part of the monthly payment, upfront or financed into the loan, the builder will provide their incentive at the time of the closing, which can cover the cost of PMI. This means that if the buyer purchases a home in the $200,000 to $300,000 price range and the builder pays the PMI, the mortgage payment will be several hundred dollars less each month.
For more information on mortgage insurance or second mortgages, contact Academy Mortgage by calling 404-713-8662 or visit www.AcademyMortgage.com.
Equal Housing Lender. (c)2013 Academy Mortgage License #3113. GA Lic. # 20505. This is not a commitment to lend. Academy Mortgage Atlanta: 5565 Glenridge Connector, Suite 400. Atlanta, GA 30342. Georgia Residential Mortgage Licensee.