First-Time Home Buyers
Guide to Private Mortgage Insurance (PMI)
Private Mortgage Insurance (“PMI”) is insurance coverage that protects lenders against the risk of making higher
loan-to-value (LTV) loans. It's typically required on all first mortgages with a down payment of less than 20% of the home's cost. The borrower pays the insurance premium on the lender's behalf. However, 1stAvenue Mortgage offers a number of very popular programs that eliminate the need for PMI, giving first-time homebuyers more buying power, appealing interest rates and savings. Here's how these programs work: A homebuyer obtains both a first and second mortgage. The first is larger and covers most of the home's cost; the second mortgage is smaller and covers the amount required to reduce the LTV below the 80% level that triggers PMI. Following are the most common “no-PMI” loan scenarios:
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80/10/10: You make a down payment of 10% of the home's cost, then obtain a first mortgage for 80% of the cost and a second mortgage for 10%.
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80/15/5: You put down only 5% of the home's cost, getting a first mortgage to cover 80% of its cost and a second mortgage to cover an additional 15%.
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80/20: This is effectively a 100% mortgage that may be ideal for first-time homebuyers who do not have
the funds for a down payment, but have good monthly cash flow. You obtain a first mortgage for 80% of your home's cost
and a second mortgage for the remaining 20%.
I can provide
more information about these “no PMI” loan options,
including monthly payment estimates to help you decide whether they suit your needs. | 
