BUSINESS CENTS
Low Down Payment Mortgages Help First-time Buyers
Access the American Dream
Article by Enact President and CEO Rohit Gupta.
on that same home requires saving only $21,000 in comparison. USMI reports that 35% of homebuyers using private MI in 2023 had annual incomes lower than $75,000.
"Private MI remains one of the most helpful tools available to first-time and low- to moderate-income buyers in the market. Private MI helps borrowers overcome the large down payment barrier to affordably and sustainably qualify for financing and start reaping
(BPT) - Traditionally, saving up for a 20% down payment has been the largest obstacle for aspiring homeowners and this challenge is even more acute when interest rates drive monthly mortgage payments higher. Despite higher rates cooling home sales last year, hundreds of thousands of first-time homebuyers leveraged private mortgage insurance (MI) to put as little as 3% down to access homeownership.
According to a report released by U.S. Mortgage Insurers (USMI), 64% of homebuyers who used private MI last year did so to purchase their first homes and to begin building equity, a 6% increase in first-time buyers' share of the market from 2020. Considering a 20% down payment on the national median home price of approximately $425,000 is $85,000, many aspiring homeowners without the resources to make large cash down payments understandably choose private MI. After all, putting 5% down on
"Private MI helps borrowers overcome the large down payment barrier to affordably and sustainably...."