My First Time Home Buyer Lesson on PMI

Back in 2002 when I purchased my first home in Jackson, Mississippi I went through all the standard steps to get approved for a mortgage. I made sure my credit report had no errors, saved for a down payment and found a lender.

I found a home that was in my price range, got it inspected by a trusted professional, then made an offer to the seller. The condominium was just what I wanted: two bedrooms, two bathrooms and a two-car garage. It was close to shopping centers that I loved. I had friends who lived nearby. Plus, getting back and forth to work was a breeze since the highway was about a mile away.

For a single professional woman, the condo was spacious, safe and affordable. I still remember the day I walked into the closing attorney’s office and spent about 40 minutes signing all of the legal documents to seal the deal on my first home.

As a prospective buyer, terms like homeowner’s insurance and homeowner’s association fees weren’t new to me. But one of the terms that caught me by surprise during the purchase of my home was PMI or Private Mortgage Insurance. PMI is an additional fee lenders charge for conventional mortgages when the buyer’s down payment is less than 20%.

PMI slightly raised the cost of my mortgage to about $600 a month, but it was still more affordable than the two-bedroom apartment I was renting. I sold my Mississippi condo in 2009 when I got married and moved to Atlanta for my husband’s job. I enjoyed the seven years I lived in my condo. But if I would have stayed in the home long enough to pay off at least 80% of the mortgage, PMI would have been removed and my mortgage payment decreased.

We’re considering buying a home in Atlanta in early 2013 once our lease is up in our apartment. Choosing a quality public school is a huge factor in our decision on where to buy our home in Atlanta. A.J. is two now, but he’ll be in kindergarten before we know it.

Since my husband is a bit of a penny pincher I’ll give him a heads up that PMI will be added to our mortgage payment depending on how much money we have as a down payment. He claims he read my blog regularly so if he brings up PMI in a conversation I’ll know he’s telling the truth.

Watch how this young family decided to get a conventional loan with PMI.

This post is sponsored by Genworth Financial where you can learn more

about mortgages and planning ahead for your family’s future.
All thoughts & opinions are 100% my own.

Disclosure: This post is presented by Genworth Financial 

where you can learn more about mortgages and planning ahead for your family’s future. 

All thoughts & opinions are 100% my own.