Will I have to get PMI insurance on a 2nd home?
I am getting ready to pay off my current mortgage. My house is worth 180,000 to 200,000. I am interested in buying another home. I could probably get the 2nd home for 300,000. The second house is worth 440,000. I won't have alot of money for a down payment, due to putting all of my money into paying off the 1st house (15 years early). I would like to live in the 2nd home and rent the 1st until the market picks back up. My credit score is 700. It may go up when I pay off the mortgage on my current home. My question is: Are there loans that don't require PMI insurance?
Pc50Mom-
Just so you know, there is NO mortgage insurance available right now on either 2nd homes or investment properties. Thus, purchasing a second home would require you to put 20% down. If you are serious about buying the second home, then you would want to hold off on paying off your current mortgage on your primary residence and use it towards the 20% down payment. Otherwise, you would not be able tp purchase the new house.
If you have any questions, please feel free to contact me.
Luke Allison
Bank of America Home Loans
828-777-8828
luke.allison@bankofamerica.com
PMI insurance is normally applied when you are financing less than 80% of the homes appraised value. It has nothing to do with your credit. So if you do not have at least 20% down you will more than likely have a PMI. I would not wait too long after you pay off your mortgage on your 1st home because it could lower your credit score. I know this sounds crazy but having a mortgage payment helps your credit. Paying it off will only add to your total worth. Please give me a call, and I would be happy to go into more detail. No obligation to me is required. However, I would be most happy to help with your question.
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