mortgage simple definition: How To Avoid PMI with Only 5% Down #5

How To Avoid PMI with Only 5% Down #5

How To Avoid PMI with Only 5% Down #5. FHA - MIP vs Conventional Lender Paid PMI

How To Avoid PMI with Only 5% Down #5 video duration 13 Minute(s) 44 Second(s), published by The Arizona Report™ on 24 08 2018 - 03:25:15.

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Here's How You Can Avoid PMI with Only 5% Down
There are billion-dollar pension funds, university endowments and hedge funds looking for a house like yours. These groups want to plunk down their cash in partnership with you for your home purchase.

The concept is called shared equity. It has been around for decades in the commercial real estate realm, but offered only recently in the residential real estate industry. One of the largest firms in the space is San Francisco-based Unison.

The challenge
One of the biggest hurdles for American homeowners seeking conventional loans is getting over the 20% down threshold to avoid private mortgage insurance (PMI). This component of the monthly payment increases the cost of the home loan. In many cases, by more than a hundred dollars each month.

This scenario also limits the buyer's best interest rate options.

Unison's cash gets you to that threshold. No PMI is required. As a homebuyer, you then have access to more competitive mortgage interest rates, your monthly payment drops and you have greater cash flow. In most cases, Unison's program can drop your monthly payment by 25% or more as compared to a fixed conventional loan with the same amount down that includes the PMI component.

In episode #4 of The Arizona Report™, I explored the Unison Homebuyer product that only requires a down payment of only 10% of the sales price. Now, Unison has launched a 5% down program to improve on the same product. Goldwater Bank in Scottsdale is the exclusive partner with Unison in Arizona for this 80-15-5 program.

Michael Micheletti returns in episode #5 to share news about the new lower down payment limit.

Here's how shared equity works during a home purchase:

Homebuyer provides a 5% down payment
After buyer qualifies, Unison contributes 15% at the close of escrow
Homebuyer and Unison together reach the 20% down payment threshold to avoid private mortgage insurance (PMI)
Buyer gets a more competitive interest rate and a lower payment because there is no PMI component
Buyer has up to 30 years to pay off Unison
At that point or before, buyer can sell the home, refinance or use cash to pay off Unison and close out the partnership
Unison can be bought out after only 3 years into the 30 year time horizon
If home goes up in value, homeowner and Unison share in the profit
If home goes down in value, homeowner and Unison share the loss
For more information and for program specifics, visit the Unison Homebuyer web page at https://www.unison.com.

#Unison
#PMI
#mortgage