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ninja · 10-31-2007, 02:09 PM

My husband and I are planning to purchase a new home in the next couple of months. I know that traditionally, without 20% down payment, banks require you to pay PMI. While I understand the bank's perspective on this, as a buyer - it seems like money thrown to the wind every month. <br />My husband has impeccable credit, so we can get a good interest rate. We just aren't in a position to put 20% down at this time. I have heard about 80/20 loans, but I am not sure if that is a better option. I am only intrested in a 30 year fixed rate mortgage - no ARM! Do I have any other options other than PMI???<br />

deli08 · 10-31-2007, 02:09 PM

Pretty much any lender will require PMI if you don't have 20% equity in your home.

hitman · 10-31-2007, 02:09 PM

You can do an 80% first that is FIXED and you can do a 20% that has a fixed feature to it, which is a popular option.

brendi · 10-31-2007, 02:09 PM

Try these 3 tactics;

a; a lease option to buy and ask the seller to
pay the PMI [or buy direct and put in the contract
that the seller reimburse you for the PMI]

b; find a foreclosure home and see if you can
get it for 25-50% below market value.
Then, the lender is insured.

c. Create a small home business that excites you and have it pay the PMI and also
earn you tons of money. [no joke, I suggest
people do this all the time to
help pay bills and have an outside income.]
just NOT mlm or other BS thing.
IT must be something you love.

i will help if you wish, no cost

go for broke · 10-31-2007, 02:09 PM

I'm pretty sure most will require it. However, in the US you should be able to deduct your PMI payments come income tax time.

Tom Ryan · 10-31-2007, 02:09 PM

there is discounted PMI with MyCommunity/HomePossible programs..you would need to qualify.

FHA is 2.25% down and it has very good PMI rates....

or you can take a higher interest rate and have the lender paid PMI product

alien · 10-31-2007, 02:09 PM

you can get a loan with lender paid mortgage insurance (LPMI). It wouldn't matter if you had an ARM or not. Less than 20 % down , you are going to pay MI. MI is now deductible. 80/20 may be the way to go, you'll get a good rate on the 1st and with extra payments to principal you can pay down the 2nd early, and get rid of the higher rate payment

bort_saver · 10-31-2007, 02:09 PM

An 80/20 or 75/25 loan eliminates the PMI requirement. The first mortgage has a lower interest rate based on credit and other items. The second mortgage has a higher interest rate, also based on credit, and comes in different flavors, i.e. terms.

Be sure the second mortgage is a LOAN and NOT a HELOC (home equity line of credit). And make absolutely certain you understand the "term" portion of the second mortgage.

Tiger · 10-31-2007, 02:09 PM

Every buyer hates paying PMI but unfortunately when you borrow more than 80% of the homes value you have to pay it. Your only options are:
1) An 80% 1st mtg and 20% second mtg- you will have 2 monthly payments and 2nd mortgage rates are higher so sometimes this is not beneficial.
2) A 75% 1st mtg and 25% second mtg-same draw backs as listed above.
3) If you qualify for a VA loan they will finance up to 100% without PMI.
4) Rural Development programs also do not have PMI.
One benefit of PMI effective this year you can take a tax deduction on the PMI paid if you fall in the designated income bracket.

Now, there are some loan programs that have a reduced PMI premium:
FHA
My Community Mortgage

Lender paid MI- is an option but you will be trading in your lower rate for this. However, I would suggest you get a quote on this to see if it would be beneficial for you.
Let me know if you have any other questions. Good Luck.

10-31-2007, 02:09 PM	#1
ninja Greenhorn Join Date: Jul 2006 Posts: 14 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? My husband and I are planning to purchase a new home in the next couple of months. I know that traditionally, without 20% down payment, banks require you to pay PMI. While I understand the bank's perspective on this, as a buyer - it seems like money thrown to the wind every month. <br />My husband has impeccable credit, so we can get a good interest rate. We just aren't in a position to put 20% down at this time. I have heard about 80/20 loans, but I am not sure if that is a better option. I am only intrested in a 30 year fixed rate mortgage - no ARM! Do I have any other options other than PMI???<br />

10-31-2007, 02:09 PM	#2
deli08 Piggy Bank Join Date: Jul 2006 Posts: 51 Rep Power: 6	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? Pretty much any lender will require PMI if you don't have 20% equity in your home.

10-31-2007, 02:09 PM	#3
hitman Greenhorn Join Date: Jul 2006 Posts: 8 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? You can do an 80% first that is FIXED and you can do a 20% that has a fixed feature to it, which is a popular option.

10-31-2007, 02:09 PM	#4
brendi Greenhorn Join Date: Jul 2006 Posts: 11 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? Try these 3 tactics; a; a lease option to buy and ask the seller to pay the PMI [or buy direct and put in the contract that the seller reimburse you for the PMI] b; find a foreclosure home and see if you can get it for 25-50% below market value. Then, the lender is insured. c. Create a small home business that excites you and have it pay the PMI and also earn you tons of money. [no joke, I suggest people do this all the time to help pay bills and have an outside income.] just NOT mlm or other BS thing. IT must be something you love. i will help if you wish, no cost

10-31-2007, 02:09 PM	#5
go for broke blah Join Date: Mar 2007 Location: bay area, ca Age: 26 Posts: 9 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? I'm pretty sure most will require it. However, in the US you should be able to deduct your PMI payments come income tax time.

10-31-2007, 02:09 PM	#6
Tom Ryan Greenhorn Join Date: Jul 2006 Posts: 17 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? there is discounted PMI with MyCommunity/HomePossible programs..you would need to qualify. FHA is 2.25% down and it has very good PMI rates.... or you can take a higher interest rate and have the lender paid PMI product

10-31-2007, 02:09 PM	#7
alien Piggy Bank Join Date: Jul 2006 Posts: 63 Rep Power: 6	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? you can get a loan with lender paid mortgage insurance (LPMI). It wouldn't matter if you had an ARM or not. Less than 20 % down , you are going to pay MI. MI is now deductible. 80/20 may be the way to go, you'll get a good rate on the 1st and with extra payments to principal you can pay down the 2nd early, and get rid of the higher rate payment

10-31-2007, 02:09 PM	#8
bort_saver Greenhorn Join Date: Jul 2006 Posts: 26 Rep Power: 6	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? An 80/20 or 75/25 loan eliminates the PMI requirement. The first mortgage has a lower interest rate based on credit and other items. The second mortgage has a higher interest rate, also based on credit, and comes in different flavors, i.e. terms. Be sure the second mortgage is a LOAN and NOT a HELOC (home equity line of credit). And make absolutely certain you understand the "term" portion of the second mortgage.

10-31-2007, 02:09 PM	#9
Tiger Greenhorn Join Date: Jul 2006 Posts: 11 Rep Power: 0	Is there a way to avoid paying outrageous PMI if you plan to finance 100% of a new home? Every buyer hates paying PMI but unfortunately when you borrow more than 80% of the homes value you have to pay it. Your only options are: 1) An 80% 1st mtg and 20% second mtg- you will have 2 monthly payments and 2nd mortgage rates are higher so sometimes this is not beneficial. 2) A 75% 1st mtg and 25% second mtg-same draw backs as listed above. 3) If you qualify for a VA loan they will finance up to 100% without PMI. 4) Rural Development programs also do not have PMI. One benefit of PMI effective this year you can take a tax deduction on the PMI paid if you fall in the designated income bracket. Now, there are some loan programs that have a reduced PMI premium: FHA My Community Mortgage Lender paid MI- is an option but you will be trading in your lower rate for this. However, I would suggest you get a quote on this to see if it would be beneficial for you. Let me know if you have any other questions. Good Luck.

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