Purchasing a home can be a cumbersome and difficult process to maneuver around. Fortunately for property buyers in Bethany Beach, there are now a variety of loan schemes on offer that help reduce both their down payments, as well as their monthly Private Mortgage Insurance (PMI). A PMI is an additional sum that is integrated into the overall mortgage payment. Schemes that allow individuals to place under 20 percent of a property’s value as a down payment, typically involve a PMI.
80/10/10 scheme
PMIs can amount to significant monthly sums depending on the total value of the property. However, there are a variety of ways in which buyers can avoid or reduce their PMI premiums. The f80/10/10 scheme permits buyers to put down just 10 percent of the total property purchase value at first. The lender will then place down 80 percent of the property value. Buyers can then use the same Bethany Beach lender or another lender to place a second mortgage of the remaining 10 percent of the property’s value, thereby taking care of the monthly PMI.
Gift of equity
For individuals who live in family-owned properties, or those looking to purchase properties from their landlords, there is the gift of equity scheme. This scheme allows the current owner of the property to place 5 percent down payment on behalf of the buyer. However, to do this, the buyer will need to provide a letter of motivation from the owner of the property, detailing the reason of sale.
It is important to remember that most of these schemes require individuals to have a credit score greater than 700. Before availing of these methods, it is always advisable to consult an experienced mortgage professional like Steve Morgan.
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