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What the heck is mortgage insurance?

1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
 
Originally posted by: cr4zymofo
And how do I avoid paying it? Other than being Bill Gates?
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I thought you were bling blinging it monthly...

Anyway you have two options

Self Insurance: Extremely good credit, you pay a little extra in APR, usually can go up to 90% LTV, I think some are doing 95%.

Government backing...they cover the loan between the 80% and higher LTV...you usually must meet a lot of guidelines. Some restrictions on property types.


Or just scrape together 20% to put down.
 
What it is: you pay for insurance so that if you default on the loan, the lender is reimbursed. Normally if you have 20% equity you aren't required to get it.

Even if you are required to have it now, keep track of when you have 20% equity so you can drop it.
 
Mortgage Insurance is you, giving money to a bank and not getting anything in return. You cant deduct it, it's just like dumping your money in a garbage can every month. Never pay it. Piggyback your loan with a home equity if you have to.
 
Originally posted by: Jzero
1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
Click to expand...

bah, I got a 80/20/0. Why put money down, when loans are cheap? Plus is still got me out of my PMI.
 
Originally posted by: Armitage
Originally posted by: cr4zymofo
Originally posted by: Armitage
VA Loan = no PMI 😀
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Yeah... but VA Loan is too stringent.
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In what way? I mean, other then having to have served in the military.
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I did look into VA Loan, but they require really good credits, which I don't have (~700). And I think they cap it at $200K.
 
Originally posted by: CPA
Originally posted by: Jzero
1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
Click to expand...

bah, I got a 80/20/0. Why put money down, when loans are cheap? Plus is still got me out of my PMI.
Click to expand...

I suppose that's still an option as I haven't finalized anything yet. 🙂
 
Originally posted by: cr4zymofo
Originally posted by: Armitage
Originally posted by: cr4zymofo
Originally posted by: Armitage
VA Loan = no PMI 😀
Click to expand...
Yeah... but VA Loan is too stringent.
Click to expand...
In what way? I mean, other then having to have served in the military.
Click to expand...
I did look into VA Loan, but they require really good credits, which I don't have (~700). And I think they cap it at $200K.
Click to expand...

uh, you dont think 700 is a good credit score? 😕
 
Also, I put down a small amount for my down payment. I believe on FHA loans, you not only have to get below 80%, but it also has to take like 5 years, no? Well my plan was to take out that amount in student loans to get below 80%, then the money saved in PMI or MIP (whichever) would go towards the student loans... what do you guys think of that plan?
 
Originally posted by: CPA
Originally posted by: Jzero
1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
Click to expand...

bah, I got a 80/20/0. Why put money down, when loans are cheap? Plus is still got me out of my PMI.
Click to expand...

Roger that!
 
I just refinanced my mortgage in order to get out from under PMI (it was $224/month). Dropped the interest rate 1% too. We only had 10% equity (or thereabouts, after the costs of the refi are factored in), so they gave us a slightly higher interest rate, which will drop down by something like a half point when we hit 20% equity. We saved 300 bucks a month right off the bat.

Anyway, PMI is evil. It sucks your soul and gives you nothing in return. bleah. It insures the lender in case you default on the loan, but doesn't do anything for you (other than reassure the lender about loaning you money.)
 
Originally posted by: vi_edit
Originally posted by: CPA
Originally posted by: Jzero
1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
Click to expand...

bah, I got a 80/20/0. Why put money down, when loans are cheap? Plus is still got me out of my PMI.
Click to expand...

Roger that!
Click to expand...

Your best rate will come from loans which don't allow borrowed funds as part of the downpayment.

You really have to know what you are doing going for a crappier rate vs money down and a better one if going for the long haul.
 
Originally posted by: cr4zymofo
Originally posted by: Armitage
Originally posted by: cr4zymofo
Originally posted by: Armitage
VA Loan = no PMI 😀
Click to expand...
Yeah... but VA Loan is too stringent.
Click to expand...
In what way? I mean, other then having to have served in the military.
Click to expand...
I did look into VA Loan, but they require really good credits, which I don't have (~700). And I think they cap it at $200K.
Click to expand...

qualifying on most regular conventional loans is 680 usually for best terms.

700-720 comes in to play for high dollar loans. The base is usually 322.7K, then 400, 500, 650, 1MM+, 1.5MM+ and 2MM+

at the 1.5MM mark you will need a better than 680, at the 2MM you are required to either have more down or have more liquidity to offset.
 
ONce you have PMI and then getabove the 20% equity mark, you have to contact the lender to get the PMI dropped. They may require the property to be re-apraised. The lender makes money from the PMI, so they may stall as much as possible.
 
Originally posted by: CPA
Originally posted by: Jzero
1. A scam to get you to pay more money, like most other forms of insurance 😉
2. Put down 20%. There are ways to finnegal 20%, for instance I am putting down 5% and getting one loan for 15% and another for 80%.
Click to expand...

bah, I got a 80/20/0. Why put money down, when loans are cheap? Plus is still got me out of my PMI.
Click to expand...

Cool
 
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