Calling all Mortgage gurus

[msuJD164]

Looking to buy/build soon. Any advice on lpmi loans? Any other ways to avoid pmi without putting 20% down?

 

[windcrysmary]

Levels of pmi up front and monthly pmi costs Depending on what % you put down ...3%,5%,10,15 etc...but no, you will not escape PMI unless you pay 20% down .. Or if you qualify for a VA loan

 

[boomboommsu]

it happens, but not often. i know no banks are offering it here on the coast. some of the mortgage finance companies will do it, but the fees and hassle are sure not worth it if you can avoid it.

you can get a USDA loan with nothing down and no 'pmi', though they charge a pmi-like 0.03%(?) monthly feefor the life of the loan. and your income has to be low for that, and you have to be buying in a 'rural' area.

btw, foreclosures are about tospike again, now that the banks have immunity for their MERS mess.

 

[opusdawg]

But without 20% down no way around the MI.

Pretty much what windcrysmary said is accurate. Conventional loans are determined on credit score and LTV (loan to value) at that time it will determine your MI.

FHA prior to April 2011 had low mortgage insurance but your paid a higher up front premium rolled into the loan, now FHA is 2X higher on a monthly scale but the up front is just 1% of loan amount. A little flip flop.

 

[Nugdawg]

While PMI requirements are tighter these days in regards to debt ratios and credit scores etc., we do plenty of loans with PMI. We hear this rumor frequently that "if you don't have 20% to put down you get no loan." It's simply just not true in our markethere (Jackson area)if you have decent credit and debt ratios. In addition, we do FHA loans, USDA loans, and VA all day with less money down, but I won't go into the details of each loan type, but to say FHA requires 3.5% down and hashigher monthly PMI.USDA is a popular 100% loan product in areas considered"rural" but my definition of rural and theirs are 2 different things and this one is limited based on household income. It also has a small amount of monthly PMI. VA...well...100% financing for veterans with no pmi.

LPMI loans just price the PMI into your rate up front. The benefit would be determined to me based on how long you plan to stay in the home. Keep in mind that monthly PMI is now tax deductable.

As for your question about avoiding PMI..it is more difficult these days no doubt. However, depending on how strong you are as a borrower. we are still able to secure some second mortgages through local banks. In other words, maybe an 80% first, 10% second, and you put 10% down as an example. Again, this is determined by ratios and credit.

If you are building, and have the construction loan in your name (qualifying for a construction loan is a whole other topic) then you can use any unused equity once the home is finished since this will be considered a construction to perm refi. If you purchase from a builder, then the above purchase rules apply..not refi.

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[boomboommsu]

i've been using Bankrate.com to keep an eye on the coast's rates. it shows no banks (except Quicken and Aim, which i don't count) asoffering <20% down mortgages in Jacktown, which is similar to how the coast has been for months. now, maybe this site sucks, if so please let me know.

mortgage finance companies are another matter, but i've had so much grief with their processes and customer service that i would prefer to avoid one.

fyi, USDA loans have a PMI-like fee, but it is not PMI. unlike PMI, it does not ever go away, it's for the life of the loan. i do not know if it can be tax deducted like PMI.

also, i've heard you can drop PMI once your outstanding loan amount drops below 80% of the assessment. but beware that assessments in MS has become a sham, i have a friend whose purchase assessment is 40% of the tax assessment.