Buying A Home
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less than 20% and no PMI??
Hello Ladies!
My DH and I put an offer on a house two weeks ago. After talking with the mortgage broker we decided to do a 5% conventional instead of FHA because we could get it with no mortgage insurance. I didn't know that you could get a loan without PMI without putting 20% down so I just assumed that it was because of our credit scores (both in the 800's). I just wanted to ask you ladies to see if this is normal. Thanks!!
Re: less than 20% and no PMI??
I haven't heard of this.
Are you putting down 5% and then getting an 80% mortgage, and a second 15% mortgage with the same lender? Or is it 5% down 95% financing on one loan? I've never seen that before.
I've seen 80/10/10 where the first mortgage is 80% the second mortgage is 10% and you put 10% down. The first 80% is a good interest rate, but the second might be a .5% higher, but there is no PMI. But even those are rare.
Sounds almost too good to be true. I would read the fine print. But if it's legit, and it works for you, great. I'm just curious what lenders do this. If you're willing to share?
I just went over my loan paperwork again just to check to make sure there wasn't any hidden fees or sneaky stuff and there isn't. There isn't a second mortgage.
We aren't borrowing from a large national bank so maybe that makes a difference. I'm going to ask my broker anyway why just so it gives me peace of mind.
Thanks for your responses/feedback!
So from my perspective less than 20% with no PMI is not unusual but ... the 5% is. Maybe banks are moving on this since over the summer ... but every bank we spoke to including our long standing bank relationships stated that no one was giving conventional for less than 10% ... forgetting about PMI. So 5% with no PMI or upfront insurance ... wow.
Life and Love at #16 | our married life blog
We are able to get 11% down with no PMI.
Our mortgage broker said something about how the house was appraised for so much more than we are buying for, it changes the % of the value that we are financing (we still have a PMI because our lender is paying closings so we chose their loan anyway). Maybe OP is in a similar situation?
Life and Love at #16 | our married life blog
There are physician loans that allow you to put 0-10% down with no PMI. They usually make back the difference by charging a higher interest rate and/or making you buy points. I think there are similar programs for other professionals with very stable incomes.
There is a program out there offered on houses owned by FannieMae (foreclosures) called HomePath. With these homes they have financing available where you can put down as little as 3% and you do not have to pay PMI. The down side is that your interest rate is a little higher. Maybe it is one of these homes?
Our broker said he could get us 90% financing w/o PMI. I think we're paying a slightly higher interest rate though. He'll crunch the numbers a few ways (80-10-10, 90-10, etc.).
Good luck!