Life in Newtown, CT

Tidbits of PMI (Private Mortgage Insurance)  So today, we sat down for a PMI (Personal Mortgage Insurance) lesson with our in-house mortgage broker, Dan Ianniello of Connecticut Home Morgage.  We learned a lot about PMI or MI (mortage insurance) as it's sometimes referred to.

Here are the tidbits of PMI that we learned:

1. There are six (6) companies that provide PMI to consumers and these companies provide different types of PMI products to consumers.



2. The premium for PMI is based upon many factors with the amount of money a buyer is putting down as one of them.  For instance if you are putting down 10%, the PMI rate would be around .62.



3. Your credit score is one of the criteria used to price PMI.



4. If you are only putting down 5% and your credit score is under 680, you may want to consider an FHA mortgage.



5. PMI only insures the difference between what you put down on the purchase and 20% of the purchase amount.  So if you put down 10% to purchase your home, PMI insures only the next 10%.

PMI isn't an exciting topic of conversation and most homebuyers don't really understand it.  What they do understand is that it costs them more money every month when they pay their mortgage.

These are just tidbits of PMI (Private Mortgage Insurance).  If you have questions about PMI, your mortgage broker should be able to answer them for you.

Bob & Richelle Ward, Realtors, ABR
Prudential Connecticut Realty
www.connecticuthomesforsale.com
Cell - (203) 470-9818

There are many moving parts to purchasing a home - two of them are the purchase price of the home and the mortgage rate.  Mortgage rates change every day, but recently they went from 4.85% to 5.75% and are now back down around 5.25%.  We have had a few first time homebuyers who have only been concerned about "the bargain" price on their purchase.  When we pointed out the variation of the mortgage rate and how it affected their purchasing power, they didn't get it at first.  This got us to thinking ...

We're going to post a few tables with lots of numbers on them.  Numbers can be intimidating, so for you non-numbers people - get ready!

Here are the constants:  If you were to purchase a $400,000 home and put down 20%, you would be left with an 80% mortgage or a $320,000 mortgage. We have set the taxes and home owner's insurance at $550/month.  Debt to income ratio is low and you have a high credit score (FICO score).

This table shows how the monthly mortgage payment and the Total Payments for the Life of the Loan change as the mortage rate increases. 

Now, how much income do you need to purchase your $400,000 home?  The mortage interest rate affects the amount of income you need to qualify for a mortgage.  The next table will show you.

Some people want a monthly mortgage payment at a set amount to fit their budget.  This last table  illustrates a set payment amount with varying mortgage rates and how your purchase power changes.

We just threw out a lot of numbers and a lot of information to you.  If you have any questions, please feel free to email us!

Bob & Richelle Ward, Realtors, ABR
Prudential Connecticut Realty
www.connecticuthomesforsale.com
Cell - (203) 470-9818

People ask us about mortgage rates all the time.  We thought that we would provide you with this information.  Keep in mind that rates have many variables to them and that they fluctuate constantly.

This information if courtesy of Dan Ianniello of Connecticut Home Mortgage.  Dan is a CMPS which means that he is a Certified Mortgage Planning Specialist. 

These rates can change in a minute, and assume perfect credit and a substantial down payment other than the FHA rates.

If you have any questions, please feel free to email us.

Bob & Richelle Ward, Realtors, ABR
Prudential Connecticut Realty
www.connecticuthomesforsale.com
Cell - (203) 470-9818

First time homebuyers can claim a tax credit worth $8,000 as part of the Economic Stimulus Package. The credit is effective as of January 1, 2009 and will expire December 1, 2009.

Amount of Credit:  Ten percent of the value of home or $8,000, whichever is less.  If you purchase a home for more than $80,000, you qualify for the full $8,000 tax credit.

Eligible Property:  Any owner occupied, single-family residence (including condos, co-ops and townhouses) that will be used as a principal residence.  If you have not owned a home in 3 years or more, you should qualify for this credit.

Refundable:  No "repayment" required, unless home is sold within the first three years.

Definition of First Time Homebuyer:  A buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

Income Limit:  Full credit is available for individuals with modified adjusted gross income of no more than $75,000 ($150,000 on a joint return). Partial credit is available up to $95,000 for individuals ($170,000 on a joint return).

Termination:  December 1, 2009

If you have any questions, please feel free to email us.

Bob & Richelle Ward, Realtors, ABR
Prudential Connecticut Realty
www.connecticuthomesforsale.com
Cell - (203) 470-9818