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Single Premium PMI

Can the single premium PMI be financed to loan amount on a 'Purchase ' transaction? My lender says , if it is added to the loan amount, it will reduce LTV based on the home's sales price and hence can not be done. Is it correct? If that's the case financed single PMI is available only for refinancing transactions? by rr342_682_950 from Salt Lake City, Utah. Jun 11th 2012 Reply


Will Whitaker (will@amlend.com)
#50 ranked lender in Utah - 6 contributions

Hi there. You can finance the single premium even on a purchase, inasmuch as it doesn't exceed the maximum loan-to-value for the specific loan product you've selected (typically 95 % with most conforming lenders). So if you're putting down 5 % only and you're financing a 2 % single premium, that would be problematic, as total LTV would be 97 % (unless the lender allows for a 97 % LTV max on the product). But you could put down 7 % in this scenario (93 % LTV) and finance the 2 %.Another option is to have the lender pay it (LPMI) or even better, negotiate that the seller pay it, so you don't have to finance it at all :). Call me with other questions if you'd like: 801-652-7320. -Will

Jun 11th 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Most lenders will allow the single premium to be financed... and some will allow 97%.. It sounds like your lender wont.. so he's not lying to you.. he just doesn't have that product available with his lenders.. 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. 480-287-5714 WilliamAcres.com

Jun 11th 2012
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Linda Miller (Linda Miller)
#2 ranked lender in Utah - 572 contributions

The previous answer by Will is almost exactly what I would have advised. The two options that I think you should consider are Lender Paid MI - the rate is slightly higher or have the seller pay it in seller concessions. The seller can pay up to 3% of the purchase price. If you have other questions, do not hesitate to call me. Linda Miller 801.550.1222

Jun 11th 2012
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Brett Pehrson (brettpehrson)
#19 ranked lender in Utah - 228 contributions

The best way to finance this on a purchase transaction is to have it included in what the seller will pay toward closing costs, or to have it covered by lender rebate (but that would ultimately just raise your rate a little). Otherwise, you have to stay within the LTV limitations. If you're financing 2% MI, then you have to put down 7% to stay within the program guidelines; which basically just means you're paying for it anyway. It could also be that your lender's program is not allowing it to be financed at all; I have seen this be the case with several lenders I work with.

Jun 11th 2012
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