How to Avoid PMI
Posted by: raindrop 7 years, 9 months ago
Private Mortgage Insurance is not always required, even if your down-payment is less than 20%. Some lenders won't request a PMI, so be sure to look around and compare alternatives.
Another option is using an "80-10-10" loan. This program involves two loans and a 10% down-payment, and 90% financed. Of the 90% financed, there is a first mortgage equal to 80% of the sale price, and a second mortgage for the remaining 10% of the sale price. The second loan has a higher rate, but since it only applies to 10% of the total loan, the monthly payments on the two mortgages are still lower than paying one mortgage with PMI.
What if your home value has increased?
When making mortgage payments, most of the initial payments are finance charges. Therefore, it can take 10 to 15 years to pay down 80% of the loan. However, if your property value increases, due to rising home prices in your area or home improvements, you may reach the 80% mark a lot faster. If you think your home value has increased, you may be able to cancel PMI on your mortgage. Although the new law does not require a mortgage servicer to proactively consider the current property value, you should contact them to see if they are willing to do so. Also, be sure to ask what documentation may be required to demonstrate the higher property value.
San Diego Homes
- 8 Tips to Make Your Home Camera Ready for Selling
- FAQ Friday: Exciting New VA loan benefits!
- FAQ Friday: Can the Buyer back out?
- Restaurant Spotlight: Rosemary Trattoria - Authentic, Family Friendly Italian
- *SPECIAL DELIVERY* Santa Claus is Coming to Coronado!
- Blog (349)
- Buyer's Guide to Buying a Home (11)
- DIY Homeowners (55)
- FAQ Buyer (36)
- FAQ Property Management (7)
- FAQ Renters (7)
- FAQ Seller (33)
- FAQ Short Sale (6)
- Friday Favorites (4)
- Home Projects (59)
- Listings (132)
- Local Info (75)
- Market Matters (34)
- Open House (18)
- Rentals (18)
- Restaurant Spotlight (1)
- Staging (1)
- Things to do (77)
- Tips (5)
- Tips for Buyers (7)
- Tips for Homeowners (5)
- Tips for Renters (5)
- Tips for Sellers (5)
- Tips/FAQs (2)
FeedsRSS / Atom
Latest NewsJanuary 31, 2020 8 Tips to Make Your Home Camera Ready for Selling January 17, 2020 FAQ Friday: Exciting New VA loan benefits! January 10, 2020 FAQ Friday: Can the Buyer back out? READ MORE
Our initial experience with you, especially with your demonstrable expertise, knowledge, and willingness to both educate and work with us regarding the market and related considerations particular to Coronado, resulted in a gratifyingly helpful and positive experience for us.—Robert R. READ MORE