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Do 80/20 loans still exist? I have an 832 credit score. Any other options to avoid PMI in Texas?

Do 80/20 loans still exist? I have an 832 credit score. Any other options to avoid PMI in Texas?
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January 13 2010 - Dallas
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Answers (10)

On conventional, the lowest down payment option is with 5% down. But there are 2 ways to avoid Mortgage insurance.

1 is with an 80/15/5 loan, which is an 80% 1st lien, a 15% 2nd lien and a 5% down payment. This option allows you to waive escrows too if you would like.

Your 2nd option is called Lender Paid MI, which is actually a better deal than the above option. You have to take a slightly higher rate on your mortgage, but its all in 1 lien and you don't have to pay any mortgage insurance. The payment works out to be better than the 80/15 option too.

Hope that helps.

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August 26 2010
Gifts are allowed on FNMA with certain limitations.  On high ratio loans FNMA requires the borrwer to have 5% of his own resources in the home purchase.  On any loan with an LTV of 80% or less the entire downpayment and closing costs can come as a gift.  Of course required documentation is required such as gift letter and source of funds gifted to buyer before or paid at closing on his/her behalf.  This is actually in the FNMA guidelines. 
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January 22 2010
That is history.
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January 19 2010
80/20 is gone the only way out of PMI is to have a down payment.
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January 16 2010

Borrowed funds cannot be used for down payment.


...maybe in 'life beyond earth' they can
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January 14 2010
Borrowed funds cannot be used for down payment.
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January 14 2010
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Yes there is a way - but it depends how you want to do it.

Since your credit score is good, you might be getting 0% balance tfr credit card offers.  You can read all about it if you google them how to get money out. Now that you have money at 0%.

You will have to keep paying minimum on those credi cards. Make sure you are up to date on payments and don't buy anything on those cards or else you will be charged a huge fee and your apr will jump from 0->25%


By standards - you will pay good amont and now - the trick is before the year expires  Open Home equity account with your lender/... on the house and payoff those credit cards, since you have establised equity in house + payments.

Since you have great credit, I am hoping that you will manage your money well too.

Good luck.
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January 14 2010

You are going to need at least 5% down so that you can do a 5/15/80.

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January 13 2010
As Nic said, 80/20's are a thing of the past. In Texas, you can opt to put 5% down and do an 80/15/5 to avoid MI.
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January 13 2010
No 80/20 loans are gone.  Only other options are VA loans and USDA rural loans.

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January 13 2010
 
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