Home Buying in Pawtucket>Question Details

Josh, Home Buyer in Providence, RI

my question is do I need to agree on a pmi on a mortgage loan

Asked by Josh, Providence, RI Thu Jan 17, 2013

90000 thousand loan for 30 year fix

This question was asked from this property: http://www.trulia.com/property/3105789266-76-Mount-Vernon-Bl…

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Robin Silverberg’s answer
I am not quite sure what your question is, as this house is listed for $85,000, and you are talking about a $90,000 loan. If you are considering an FHA 203K loan, then you would be paying MIP, which is the FHA equivalent of PMI.
Paying PMI is never an "option", nor is homeowner's insurance when you have a mortgage. If you put down less than 20%, unless you can split the loan between a first and second mortgage, such as in an 80-10-10 deal, you would have to pay PMI in some form, either monthly or 1 time up-front on a conventional loan, or as previously mentioned MIP.
1 vote Thank Flag Link Thu Jan 17, 2013
unfortunately Josh if your lender is require it you don't have a choice.
It's the golden rule they have the gold they make the rules. If you are putting less than
20% for a conventional loan PMI is required the only way to challenge it is if the appraised
value show you have more than 20% equity.
0 votes Thank Flag Link Tue Dec 17, 2013
Depends on the LTV ratio. More down, less pmi. Email or call me, and I would be happy to help you out with optimizing your project. I'm in Providence too.
0 votes Thank Flag Link Thu Jan 17, 2013
No, put down 20% on the loan and forget about the PMI.
0 votes Thank Flag Link Thu Jan 17, 2013
Golden rule applies. They have the gold they make the rules.
If the lender requires it there isn't much you can do.
0 votes Thank Flag Link Thu Jan 17, 2013
Unless you are putting 20% of the purchase price down, you will have to pay mortgage insurance. There are some exceptions (HomePath/HomeSteps no PMI mortgage financing, etc.), but for the most part on any FHA loan product you'll be paying PMI until you've paid a considerable portion of the loan amount down.

Your options are to A. make a down payment of at least 20% ($18,000 in this case), B. find a HomePath/Steps eligible foreclosure owned by Fannie Mae/Freddie Mac (you'll pay a higher interest rate however as a trade off).

You don't have to agree to pay the PMI - but you won't get the loan if you don't. Make sure you read and understand the Good Faith Estimate your lender is obligated to provide you. Often these are a little "overestimated" to protect the lender from being responsible if the totals end up being higher. This document outlines your financing in detail, and breaks everything down for you.

Hope that helps!
0 votes Thank Flag Link Thu Jan 17, 2013
You should be getting two things from your Lender:
A copy of the GFI which deliniates everything,
and a good explanation to your question.
0 votes Thank Flag Link Thu Jan 17, 2013
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