Hello Nita,

The advice that Mr. Varghese gave below is unfortunately incorrect. In all fairness, perhaps it was a typo that he did not catch? PMI is only required if your "LTV" (loan-to-value) ratio is higher than 80%. In other words, if you plan to put less than 20% down.

There are loan programs available with "LPMI" (lender paid mortgage insurance) that carry a slighlty higher interest rate and NO monthly mortgage insurance. The lender has built the cost of mortgage insurance into the rate. We offer these programs at both the 90% and 95% loan level. You may also have heard that FHA financing carries a lower monthly mortgage insurance cost than a conventional loan, with generally less stringent approval requirements.

There are certainly pros and cons to LPMI, conventional PMI and FHA financing. With our exclusive software, I can tailor a one page visual comparison for you that will easily demonstrate the short and long term advantages for each option. This will no doubt assist in making a fully informed decision for the right type of financing for you. Feel free to email me at: jconlon@milestonemtg.com. Or review my website listed below for current mortgage rates.

With home prices and mortgage rates at an all time low, congratulations on your decision to buy at the most opportune time!
All my best,
Julie Conlon
Sr. Loan Officer

What are agents doing answering questions on financing. As a loan officer of over 25 yrs I have NEVER met a real estate agent who knew anything usefull on lending ...actually , on anything for that matter. They are out there finding the most croked mortgage brokers they can find to push fraudulent loans through the system. DO NOT take the advise of these money grubbing, can find a real job, usless, careless idiots.

As a general rule PMI is required if LTV is less than 80%. However there are lenders out there who do not want PMI. Keep in mind their rates are a little higher for taking the risk!!!!

Nita, so many different programs out there. It used to be people would get an 80% first and then a 10% second to avoid the PMI but many of these secondary financing loans are now gone. And typically anything over 80% will require PMI. You really will need to check around with some local lenders to see what they can offer you. Now depending on price range there are programs out there up to 100% financing , or close to it, that can avoid PMI but they are specific to income, housing cost and other factors. I'm happy to offer you the names of some local lenders you can call if you need that.

Nita,

The answer is yes and no. Yes, PMI is required for loans above 80%. No, as some lenders offer products (loans) up to 90% with PMI cost built in to the rate. So, to avoid PMI you need, either two loans (80% + 10%), or find a lender who offers loans with PMI payment built in. You can ask your mortgage broker for help to find lenders with such products.