If I purchase a home with an appraised value that is 20% or greater than the purchase price i.e. a foreclosure, will I need pmi?

Asked by timkenney79, Coeur D Alene, ID Sat Dec 29, 2012

Im looking to buy a home that appraises out at 500,000 for 400,000 and have 20,000 for a down payment making the purchase price 380,000.

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4
, ,
Thu May 9, 2013
You will have to pay pmi and sometimes on jumbo loans you will need more than 20% down and a higher credit score on jumbo loans.

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com
0 votes
David Pauley, , Louisville, KY
Mon Dec 31, 2012
If you are using Fannie Mae's HomePath mortgage for eligible Fannie Mae foreclosures, you would not have to pay private mortgage insurance. Any other traditional mortgage program is based on the lesser of the purchase price or the appraisal.

I hope this information is helpful. We are a HomePath lender. Would be happy to discuss more about that program with you, if you would like.
0 votes
, ,
Mon Dec 31, 2012
Yes, the lender must insure the loan unless you make a 20% down payment. The servicer that you make the payments to may or may not allow you to get it appraised later. Most lenders will but there is no upfront guarantee because they do not know how long they will keep the mortgage in-house. The only absolute is they must remove it once you pay down the balance on the mortgage to 78% of the original purchase price which is $312,000. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference:  http://jamessimms.com/
0 votes
Carl Henker, , 95928
Sat Dec 29, 2012
PMI is based on the purchase price of $400,000. If it is worth more you made a good buy. If your are using conventional financing you may be able to remove PMI in a couple of years with a new appraisal.
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