If you’re purchasing a home for the first time, you may not be aware of other costs associated with buying a home in addition to monthly mortgage payments. One of those costs is private mortgage insurance, commonly referred to as PMI. For many homebuyers who have not been able to save for a big down payment, PMI can help them to still purchase a home instead of having to pay rent. Let’s look at
homebuyers’ commonly asked questions about private mortgage insurance, what its purpose is, and when and how you can stop paying it.
Historically low interest rates — which hovered under 3% in the last week of 2021 — have lots of homeowners wondering if they should refinance their home. And in fact, home refinance became increasingly popular last year as more Americans elected to stay in their current homes rather than enter a highly competitive home buying market.
If you own a home, you may have imagined more than once what it would be like to say, “My house is paid off! I don’t have a mortgage anymore!” Go ahead: Add in a little happy dance, and maybe throw a few fist pumps in the air, because paying off a mortgage is a big deal. According to 2020 data from the U.S. Census Bureau, about 38% of owner-occupied homes are owned free and clear; for homeowners under age 65, the share of paid-off homes is 26.4%.
In 2020, Americans spent much more time than usual working, eating and entertaining themselves inside their homes. That’s due in no small part to the COVID-19 pandemic. One study by the U.S. Bureau of Labor Statistics found Americans
spent 10 waking hours a day at home in 2020; in 2019 it was less than eight hours a day. That meant Americans also had more time to scrutinize their spaces — which has led to a serious home improvement boom. Spending for nearly every kind of home improvement and renovation project, from painting and other minor facelifts to a complete home renovation, grew nearly 3% to $420 billion in 2020, and it’s expected to grow another 4% by the end of 2021.
Being a first-time home buyer is equal parts exciting and stressful. The idea of finding the home of your dreams to start the next chapter of your life is thrilling, but the thought of making such a major financial commitment is nerve-wracking. And once you start the process, your head can go spinning. What are FHA loans? How do I obtain a mortgage? What other types of mortgages are available? What are closing costs?
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