Get All the Facts about PMI

Get All the Facts about PMI | Simplifying The Market

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase a home with a down payment below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 6%, while repeat buyers put down 14% (no doubt aided by the sale of their home). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

Get All the Facts about PMI | Simplifying The Market

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and to help you make the best decision for you and your family.  Give me a call – J.P. Cook – 602-320-4253.

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9021 W Williams Road Peoria, AZ 85383

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4.5 Baths
2,682 SqFt
Status Active
MLS # 6770947
Property Type Single Family Residence
Price Type --
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$1,050,196
3 Beds
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MLS # 6652431
Property Type Single Family Residence
Price Type --
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32442 N 142nd Street Scottsdale, AZ 85262

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Price Type --
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Price Type --
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Property Type Single Family Residence
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3,152 SqFt
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Property Type Single Family Residence
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2667 E Overlook Drive Williams, AZ 86046

$1,050,000
3 Beds
3 Baths
2,431 SqFt
Status Active
MLS # 6777301
Property Type Single Family Residence
Price Type --
Welcome to 2667 E Overlook Dr in Williams, Arizona—your gateway to luxury and adventure. This stunning property, located in the exclusive gated community of Cedar Mountain Heights, offers over 2,600 square feet of luxury country living on 6 acres of high desert chaparral. It's the perfect retreat for families looking for a vacation home or for an investor seeking a lucrative VRBO opportunity after waiting period is satisfied. Situated just 50 miles south of the Grand Canyon, 15 miles from Route 66 and Bearizona, 42 miles to Flagstaff, and 70 miles to Sedona, this property serves as an ideal base for exploring Northern Arizona's most iconic destinations. The area is famous for its exceptional stargazing—imagine the entire Milky Way during new moons— and offers endless outdoor activities, including camping, off-roading, and exploring ancient native ruins. The home itself is a masterpiece of design and comfort, featuring hand-scraped solid hardwood floors, vaulted 16-foot ceilings, and a harmonious blend of modern amenities with reclaimed rustic accents. The fully equipped entertainment kitchen, complete with stainless steel appliances, granite countertops, and plenty of counter space, is perfect for hosting large gatherings. There are four spacious bedrooms, including a 300-square-foot master suite that boasts a cozy wood-burning fireplace, a luxurious spa tub, and direct access to the expansive wrap-around deck with breathtaking views of the western horizon. A 500-square-foot private studio suite above the garage comes with its own kitchenette, offering additional privacy and convenience. The living room, master bedroom, and second bedroom all open onto the deck and the stunning views of the vast landscapes stretching to the horizon. Outside, you'll find incredible spaces for entertaining and relaxation, including a large circular flagstone patio with a generous fire pit, perfect for gatherings and stargazing. The property is adorned with beautiful juniper trees and offers stunning views of wind farms, desert landscapes, and the Coconino National Forest, which is just a short walk away and features numerous trails to explore. Cedar Mountain Heights, an exclusive gated community with under 30 parcels, provides a serene, rural lifestyle at an elevation of 6,500+ feet. Residents enjoy clean air, moderate summers, crisp white winters, and the chance to observe a diverse range of wildlife, including elk, deer, mountain lions, and hummingbirds. The HOA ensures that the road is maintained year-round, including snow removal during the winter months, making the property accessible throughout the year. Currently operating as a successful VRBO, this property presents a fantastic investment opportunity with a proven rental history. Potential buyers interested in continuing the short-term rental model can inquire for more details on rental regulations and income potential. Additionally, the property offers room for customization with an unfinished basement that has been pre-designed for a movie theater space, ready for your personal touch. The sturdy construction, featuring 2x6 walls, also provides ample storage space and possibilities for future expansion. Utilities for the home include hauled water, propane for heating, electric service provided by Arizona Public Service, and a conventional septic system. The HOA takes care of road maintenance, ensuring easy access year-round, including during snowy winters. 2667 E Overlook Dr is more than just a house it's a lifestyle. Whether you're seeking a peaceful family getaway, an adventure-filled base for exploring Northern Arizona, or a profitable investment property, this home offers it all. Don't miss the opportunity to own this exceptional property in the heart of the great high desert of Northern Arizona.

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