When buying a home in Chetek WI, you will be crunching numbers to estimate your monthly mortgage payment, including everything from maintenance costs to utility bills. But one factor you may not be considering (or even aware of if you’re a new buyer!) is private mortgage insurance or PMI.
Private mortgage insurance is required for Chetek homebuyers that put down less than 20 percent on a property. This is another monthly fee that will be tacked onto your mortgage payment and while that may put a damper on your excitement as a new buyer in the City of Lakes, the good news is that you can get rid of it down the road. How? Six Lakes Realty is sharing two ways below!
Make home improvements
One way you can get rid of PMI once you’ve purchased a home in Chetek WI is to make home improvements. A little sweat equity will go a long way in terms of boosting your value and saving you money! After you have renovated such rooms as a kitchen or bath, wait one year, then have your home appraised. If the appraisal returns with a high enough value that pushes your loan-to-value (LTV) ratio below 80 percent, you will be able to eliminate your PMI.
Make extra mortgage payments
It may seem simple and obvious, but another way to eliminate your PMI is to keeping paying your mortgage. It may take you several years to get your LTV ratio to the point where you can cancel PMI—as I mentioned above, typically around 80 percent—but this way, you won’t need to stretch your finances too much and you’ll eventually see the light at the end of the tunnel. If you can, consider making extra mortgage payments to get there faster.
Private mortgage insurance may be necessary to purchase your dream home in Chetek WI, but remember that you won’t be paying it forever. Get to know your loan-to-value (LTV), or the amount of money you borrowed compared to your home’s value, and then make a plan toward your goal of lowering that number and finally, dropping PMI.
As your local real estate experts in Chetek, Six Lakes Realty is here to help you with every aspect of the home buying process, from recommending a lender where you can get pre-approved to finding the perfect property! Give us a call today for more information about available homes or with any questions you have about becoming a homeowner in Wisconsin.
We look forward to hearing from you!
Six Lakes Realty
Office: (715) 924-4806