Forgotten Your Password?

Need to Register?

Question Icon

If I am putting less than 20% down payment, do I have to pay mortgage insurance?

by todd_k115 from Alum Bridge, West Virginia. Jan 19th 2016 Reply


FHA loan yes. Conventional no.

Jan 19th 2016
1
0

Well. I rwsd it wrong. There are ways around it

Jan 19th 2016
1
0
Timothy Howard (timehoward)
#70 ranked lender in Utah - 154 contributions

The ways around this are to pay the Private Mortgage Insurance is to buy it upfront by adding it as a closing cost. this will help get away from the Private Mortgage insurance issue.FHA has the PMI for the whole life of the loan, USDA Rural also has the pmi for the life of the loan, If you are a veteran, then there is no PMI what so ever.On the conventional side, you can do a second mortgage to also get rid of the pmi. This is done by have the first mortgage at 80% Loan to Value and the second could be used for the remaining amount up to 95% Loan to Value depending on the lender. Hope this helps.

Jan 19th 2016
1
0
Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

You will have to pay mortgage insurance on any loan over 80% unless you buy it out or finance it in one of a few different ways. You will have to pay mortgage insurance on all FHA loans

Jan 19th 2016
1
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Yes.. unless you you have VA benefits available to you, then all other conforming lending programs require MI if you have less than 20% down. FHA and USDA will have MI regardless of your down payment, and it would be there in most cases for the life of the loan.. There are conventional loan products that will do "Lender Paid" MI, or "Upfront" MI, but regardless of how it's sold, YOU are the one paying it. either in the form of a higher interest rate, more down payment, or a premium added to your payment.. When it comes to MI on conventional loans, understand that the higher the credit score the lower the premium.. also the larger the down payment, the lower the premium. For a 720+ credit score borrower with 5% down, they will pay an MI premium approximately $52 per month for every $100K financed, which when you think about it, really isn't that expensive. But the best part is that after you have paid for at least 2 years, and when your property value increases to where you have 20% or more equity, you can contact your lender and request the MI be removed, and you wont have to refinance to do it. With an average appreciation of 3% to 5% per year, then it's possible you can get MI removed after 3 to 4 years... Even sooner if you put 10% or 15% down. But, If you do "lender paid" MI, you total payment would be the same, but the MI cannot be removed because it's built into your rate.. you would have to refinance to get it gone.. with an "Upfront" MI premium, you would not get any of those funds back regardless of how much equity you build, which is why I suggest you just pay regular MI and then get it removed after a few years. 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

Jan 19th 2016
1
0
Subscribe to our news feed.