home loans boise loanMonthly private mortgage insurance really stinks! Or does it?  If you are a highly qualified home buyer, you may be able to take advantage of private mortgage insurance.  That ability will save you an additional 10 to15% less for the down payment, of the normally required 20%.

With the end of purchase money seconds, 80-10-10 and 80-20, the private mortgage insurance companies are now “calling the shots” when is comes to home loans.   If a Boise home buyer is putting less than 20% down on a conventional loan, they must have great scores (700+) and total debt ratios less than 41%.  And the PMI guidelines are changing on weekly bases. 

If a Boise home buyer is lucky enough to qualify for private mortgage insurance, it is actually a good deal.  Let’s do some math….  

To use a purchase price of $250,000 as an example, the home buyer would put 10% down instead of 20%, saving $25,000.   The monthly PMI payment would be approx $140 per month.  After 7 years of regular P and I payments, the mortgage insurance would automatically drop off.  Seven years of PMI payments would total approx $12,000.  That is a $13,000 savings and if the 25k is invested for those seven years, the savings are even greater.  Ask your financial planner for a 7 year proposal option for $25,000. 

If the property happens to appreciate, the PMI could drop off even sooner. That would be great!

There are many PMI examples that can be tested.  Depending on a person credit scores, debt-to-income ratios, and amount of down payment, the cost and time lines will all be different.  Contact your local loan consultant for specific questions and time line analysis.

Go to www.micanews.com for more details regarding private mortgage insurance and how to qualify for cancellation. Good information for Boise Idaho home owners and consumers.

There are still many options for home loans in Boise.  Please take the time to check it out.

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