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What is the best way to avoid PMI without putting the full 20 percent down?

by philip442 from Sedro Woolley, Washington. Oct 21st 2016 Reply


Larry Gray (lgray_312_247)
#1 ranked lender in California - 900 contributions

There are loans available at as little as 3% down payment without PMI. It helps the better your mid fico credit score is in regards to getting a good rate with lender paid pmi. You will receive a higher rate with no PMI or lender paid PMI really, but still lower than most people would think. Savings tends to be better with lender paid PMI than borrower paid PMI. Sometimes it might make sense to pay PMI up front, for the lowest rate. The formula I always recommend in helping you make your decision is calculating how soon you recoup your cost with the monthly savings. Most people, limited in funds, will select the no pmi loan if their credit is good enough to get a rate as little as half a point higher than one with PMI. It is good you get an easy to compare side by side loan comparison of your best options.

Oct 21st 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,402 contributions

You cannot.. regardless of how it's pitched to you, you will pay PMI.. (unless you have VA benefits available to you, VA has no MI)... When it comes to mortgage insurance, there are several ways to pay for it.. you can pay it monthly (you paying), you can accept a higher interest rate and have the lender pay it for you, this is called "Lender Paid" but again, it's actually YOU paying.. you can also do a "Single Premium", which means you pay a "one time, upfront" MI policy.. (Again, you paying)... or there is a combination called a split premium where it can be a combination of the above.. You could also consider doing a 80% first, and a 10%-15% 2nd, but this is not the best way to go in most instances.. your payment will most likely be higher than if you just paid PMI.. However, here's the reality.. the cheapest way to go is to PAY PMI.. let me explain.. If you have high credit scores, say 760 or above.. and you put 5% down.. then for every $100,000 financed, your monthly PMI payment would be less than $35 per month.. And once you have paid for 2 to 3 years, and once you reach 20% equity, you can contact your lender and ask them to remove the PMI.. so long as the value is there (supported by an appraisal you pay for), they will drop it and you wont have to refinance to do it.. 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

Oct 24th 2016
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Michael Ross (michael.r2@bank34.com)
#129 ranked lender in Washington - 2 contributions

We have a couple of options to remove monthly MI.1. Use lender paid MI which is paid once up front by us and then you have no monthly MI.2. Offer two loans using 80/10 and have 10% down.Both options are credit score driven so we will need to review your credit and determine which fits your situation the best.Call me if you have further questions or would like to get fully approved.We are able to do loans in all states except NY.RegardsMichael Ross206.890.1200

Oct 21st 2016
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Joe Metzler (JoeMetzler)
#22 ranked lender in Minnesota - 3,262 contributions

If you do not put down 20%, you have to deal with PMI somehow. PERIOD. The first option is two loans, the 80% first, and the second. (This isn't anywhere near as 'cool' as people think these days for most people.) The next option is borrower paid single premium, where you pay 3-years worth of monthly PMI up-front at closing. The last options being lender paid single premium, where the lender increases your interest rate to collect enough to pay the 3-years worth of monthly PMI up-front for you. None of these are automatically good or bad. They all need to be looked at. If you have excellent credit, paying monthly PMI is relatively cheap, and it can still go away. As I review these options with clients, especially great credit clients, paying monthly PMI is almost always the best route once you consider all the factors.

Oct 25th 2016
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