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Any banks out there offering a 5% down payment program without PMI?

by sandra.w756 from Grand Island, Nebraska. Dec 17th 2015 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,924 contributions

Be careful Sandra.. the only conforming loan program that has no PMI with less than 20% down is a VA loan and you must have VA eligibility to qualify.. Understand that there are several types of MI being offered today.. There's borrower paid monthly, Upfront borrower paid single premium, Upfront lender paid single premium, Lender Paid monthly premium, and a "Split Premium" which is a combination of upfront and monthly.. But regardless of what anyone tells you, or how it's pitched to you, it will always be YOU paying.. All the "Lender Paid" MI products are done by increasing your interest rate and they take the added profit and pay the MI for you.. but as I said, it's always YOU paying.. either by bring extra cash to the table, by financing it in a higher interest rate or by paying monthly, but it's always YOU.. So that's the Bad News... But here's the good news.. You should only do "Borrower Paid monthly" MI.. and here's why.. Borrower paid monthly MI is the only "cancelable" MI option. All the other types of MI are there for the life of the loan, and are non refundable in most scenarios. But If you put 5% down, and you see an average appreciation of 3% per year, and all the while your lowering your principal balance by making payments, then within 3 to 5 years, you would have enough equity to have the MI removed, and you don't need to refinance to do it. All you would need to do would be to contact your loan and make a request. You will have to pay for an appraisal, but so long as the value is there, the MI will be dropped. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Dec 17th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,522 contributions

Sure... every single lender can do that. But the reality is that you still have PMI. If you are not putting 20% down, you have to deal with it. You are not getting away from it. You will pay somehow. Higher rates to pay for PMI through rate, a big chunk of extra money at closing to buy out of it, or have standard monthly mortgage insurance.

Dec 17th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

Good info from others, unless it is an "internal" loan which would likely have a significantly higher interest rate, PMI is required with 5% down. However, it is possible to set the loan up so that there is not a monthly PMI payment. Many people make their decision based on amount of cash needed to close and total monthly payment and a good, experienced mortgage officer will work with you to find the best option for your situation.

Dec 17th 2015
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