what are the rules for PMI when buying a home?

Asked by Lisa, Alabama Sun Apr 5, 2009

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3
Jeff Jones, Agent, Birmingham, AL
Sun Apr 26, 2009
If you put down less than 20% then you need to pay PMI in addition to the loan (principle & interest or P&I).
PMI is required on all conforming and FHA Loans but FHA is capped at .5%

Jeff Jones
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0 votes
Barry Lynn M…, , Trussville, AL
Mon Apr 6, 2009
PMI is required on all conforming and FHA Loans but FHA is capped at .5% because of the up front premium you can see how much you will be paying on conforming by visiting MGIC website and click the rate finder. VA and USDA do not require monthly PMI. I personal think that if you qualify for a USDA loan that is the best loan you can have send me an e-mail and I will send you the website to check if your property qualifies
0 votes
Jeff K, Home Buyer, Bristol, PA
Sun Apr 5, 2009
Hi Lisa,

Generally, if you put down less than 20% then you need to pay PMI in addition to the loan (principle & interest or P&I).

Some more info:

When the loan is paid down to 20% of the original loan amount (not purchase price) the homeowner may request that the PMI be removed with the necessary documentation (an appraisal). The lender will not notify the borrower (as it is not currently required by law) when the homeowner has reached that magic number of 80% loan to value. Legislation is pending currently to make lenders more responsive to borrowers regarding notification and removal of PMI.
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