So it will cost a little more but will save you a lot in the long term with not having mortgage insurance. Give me a call if you wish to discuss it and your options.
One other way is by financing a home with a Lender paid PMI, which is no monthly PMI but results in a slightly higher interest rate.
One thing to remember is that although an FHA loan has a monthly PMI, it is not for the life of the loan, so you have to look at all options and compare the overall cost of each program.
Working with a professional mortgage consultant who is affiliated with the largest Home mortgage lender is your best bet.
The easiest way to avoid PMI is with a conventional loan and a one time payment to buy out the mortgage insurance. Depending on the loan to value, this can be fairly inexpensive to do.
Angela Davis - Associate Broker
GRI, CLHMS, CRS, AHWD, CNE
Million Dollar Guild Member
Signature Realty Associates
Direct: (813) 545- 3118
Fax: (813) 643-5776
And contact me for a personalized report comparing your options, so you can make an informed decision on what will be best for you. Thanks!
I think you are confusing some things. PMI stands for principle mortgage insurance. That is a fee/insurance you pay each month (included in your mortgage payment) when you owe more than 80% of what the home is worth.
I think your question is how do you purchase a NEW home when you don't have the 20% down payment to get a typical conventional loan.
It really depends on what kind of home construction you are doing.
If you plan on building a custom home, a draw system is commonly used (the foundation is put in and the bank gives you the money to pay for it, then the framing is done and the bank gives you the money...etc). This is a risky loan since the bank is lending you the money in allotments and the risk is whether or not the house will be fully completed and worth all the money lent to build it.
If you wait on the mortgage until after the home is finished (the builder holds the note or you buy into a development where they build it you buy it), you have many more financing options. It is possible you could do an FHA Loan with only 3.5% down.
The rules are changing every day. You should consult with a local mortgage rep to determine exactly what options you have based on what you are trying to do.
Long & Foster Real Estate, Inc
Lehigh Valley Office, PA