Do lenders still require PMI for a loan with less than 20% down for 2nd or 3rd etc time home buyers who have always paid well and are low credit risk?

Asked by Nvanpelt, 32257 Tue Aug 3, 2010

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8
, ,
Tue Aug 3, 2010
BEST ANSWER
Hi Nvanpelt,

For the most part, PMI will be required if you put less than 20% down no matter how many homes you've owned.
As Alma pointed out, USDA loans do not require monthly mortgage insurance but you would need to buy in places like Fruit Cove, Sawgrass or Yulee.

Here are couple of other options.
1) Do an 80/10/10 - meaning put 10% down and get a 1st and 2nd mortgage combo loan.
2) Buy a Fannie Mae owned home using the HomePath program which does not require monthly mortgage insurance.
3) Lender paid MI - this option has an increased interest rate but no monthly mortgage insurance.

Please feel free to contact me for more information about these options
3 votes
Dp2, , Virginia
Tue Aug 3, 2010
From a lender's perspective, the credit risk is still the same for a first, second, or n-th time buyer who doesn't put at least 20% down, and many of them would love for buyers to put even more down.
1 vote
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Fri Aug 6, 2010
Sure, why not? (Now we add filler due to the 25 character rule.)
0 votes
, ,
Fri Aug 6, 2010
@Dp2

You're welcome. Thank you to whom ever gave me the best answer
0 votes
Dp2, , Virginia
Wed Aug 4, 2010
"3) Lender paid MI - this option has an increased interest rate but no monthly mortgage insurance."

Thanks for the info, John. I didn't know about that option.
0 votes
, ,
Tue Aug 3, 2010
Hi Nvanpelt,

For the most part, PMI will be required if you put less than 20% down no matter how many homes you've owned.
As Alma pointed out, USDA loans do not require monthly mortgage insurance but you would need to buy in places like Fruit Cove, Sawgrass or Yulee.

Here are couple of other options.
1) Do an 80/10/10 - meaning put 10% down and get a 1st and 2nd mortgage combo loan.
2) Buy a Fannie Mae owned home using the HomePath program which does not require monthly mortgage insurance.
3) Lender paid MI - this option has an increased interest rate but no monthly mortgage insurance.

Please feel free to contact me for more information about these options.
0 votes
Alma Kee, Agent, Tampa, FL
Tue Aug 3, 2010
You can get a non-PMI mortgage if you and the property address qualify for a USDA mortgage.
0 votes
Caroline York, Agent, St Petersburg, FL
Tue Aug 3, 2010
Yes. It has nothing to do with the buyer's track record. This mortgage insurance is to protect the lender.
0 votes
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