Home Buying in 85718>Question Details

Jim, Home Buyer in Tucson, AZ

My purchase price is $230,000. I can put down 18% or $41,000. I really do not want to pay PMI. Should I use conventional or VA?

Asked by Jim, Tucson, AZ Mon Oct 10, 2011

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Most buyers that object to paying PMI are usually not well informed about how it actually works. Make sure your lender explains the options. Past that point, the seller can pay closing cost and pre-paids on most mortgage which will run more than 2% and that will free up enough to get to the 20% required to skip PMI. Lender paid PMI alluded to below is not one of my favorite tools if you plan on living in the home for very long.
1 vote Thank Flag Link Tue Oct 11, 2011
Jim,
You might look at a FHA as a tool in the future.. this loan is assumable. The future of lending may require us to trade loans with homes.. just a thought.
Web Reference: http://bradbergamini.com
1 vote Thank Flag Link Mon Oct 10, 2011
If you are eligible for using the VA loan I would use that option first. You do not have monthly Mortgage Insurance with a VA loan, only an upfront funding charge that can be financed. If you are going to put 18% down more power to you but most of my clients when using the VA loan will use minimal down payment. The VA loan is .25% higher in price at the most and you should be very satisfied with loan.
Should you opt for a conventional loan and want to put the whole 18% down you may want to consider a smaller down payment and making a lump sum or "one time" mortgage insurance fee that would be paid at closing thus eliminating the monthly fee. Good Luck, I would be happy to help you out.

Matt Puzz
Licensed Loan Originator
Amerifirst Financial, Inc.
602-410-9333
Web Reference: http://www.mattpuzz.com
1 vote Thank Flag Link Mon Oct 10, 2011
Hi Jim,
You are stating that you are putting 18% down payment. Conventional financing and VA both have a small mortgage insurance expense. The MI is greatly reduced because of the large down payment, Mortgage insurance is also tax deductible. I would not be concerned about this. I would be able to compare the various programs for you if you contact me,
1 vote Thank Flag Link Mon Oct 10, 2011
In concert with all of the other agents who have already answered, there are many qualified mortgage brokers in the Tucson area who will be happy to professionally answer all of your mortgage questions, often over the phone in a few minutes time. Good Luck!
0 votes Thank Flag Link Mon Oct 10, 2011
Hi Jim,

Your mortgage broker will be able to show you the best options for your particular financial circumstances. There are conventional loan programs where you can pay points (a point is 1% of the loan amount) and the private mortgage insurance (PMI) is waived. You would have to stay in the house 5 - 7 years to break even on this deal UNLESS you get the seller to pay your points. Then it's a no-cost way for you to avoid the PMI. The seller can contribute up to 3% of the sale price to your closing costs on a conventional loan.

But VA may be a better way to go because of the 0% down payment. I always prefer to make the minimum down payment and keep my cash for investing or emergencies.

Best regards,

Donna
0 votes Thank Flag Link Mon Oct 10, 2011
Great question. I would recommend talking to a mortgage lender as the mortgage business changes almost daily. I recommend VIP Sundt Mortgage (Jerry Sundt 520-322-5626 or Nova at (Ian Brandon 520-577-4761) . They are the experts and will steer you the right way.
0 votes Thank Flag Link Mon Oct 10, 2011
With that large of a down payment you need not worry about PMI, and as a VA if it is your 1st time using it then the interest rate may be a little less than the conventional: however your best bet is to ask a loan officer. As a Former Marine I have consrtructed a team of Professional that can help you every step of the way feel free to contact me 520 370 2092 0r visit my website at http://www.tucsonhousesearch.com/
0 votes Thank Flag Link Mon Oct 10, 2011
My first thought is FHA but i would prefer to refer you to my trusted preferred lender here in Tucson so he can run all of the scenarios and provide you with the most beneficial options.
0 votes Thank Flag Link Mon Oct 10, 2011
If you can go VA, probably best way to go. You will have PMI until you own 20% on Conventional, if it is really that important to you, but a house slightly less or save a little longer.

Honestly, all these questions really should be answered by a lender, I prefer a local lender like Nova Home Loans. I refer business to Paul Volpe, Vice Pres of Nova Home Loan (241-4048). You can give him a call for a conversation, what to expect, which loan is best for you, mortage calculator, and get pre-approved. None of it cost you anything nor is there any obligation. In fact, I suggest to all home buyers, getting pre-approved should be your first step in today's market.
Best of luck.
Spirit
0 votes Thank Flag Link Mon Oct 10, 2011
Hello Jim.

Please consult a mortgage broker. I heard there are programs wherein you need only to put 10 percent down without paying PMI.

My information is first hand from a local broker here in CT. Therefore it is advisable to get other mortgage broker's opinion.

Best of Luck.

Maria
0 votes Thank Flag Link Mon Oct 10, 2011
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