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Do you usually only pay mortgage insurance if you are putting less than 20% down?

Do you usually only pay mortgage insurance if you are putting less than 20% down? So if you make at least a 20% down payment, will you not have to pay mortgage insurance every month? 
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March 31 2012 - Santa Monica
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FHA loans have changed over the years, even with a 20% down payment you will still have PMI .. for 5 years  .. that is what my lender told me. 
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April 06 2013

If you put down less than 20% you may still have to pay mortgage insurance if you can't qualify for a conventional loan. If someone can only qualify for FHA due to their credit (just as an example) they will have to pay monthly mortgage insurance for at least 5 years because all 30 year fixed FHA loans require mortgage insurance, regardless of down payment.

Conversely there are also loans out there that don't require mortgage insurance if you put down less than 20%. But they are very few and far between. One example would be a Homepath Mortgage.

It's also possible to avoid monthly mortgage insurance on a conventional loan, even with less than 20% down, with lump-sum or lender paid MI. Paying a lump sum (often referred to as BPMI) would be paying a lump sum to the MI company at the time of closing and in return not having to pay monthly MI, it's all taken care of up front. There are different ways to structure this, some can have your lender kick in a portion (or even all) of the lump sum premium. Lender paid MI (LPMI) is where the entire lump sum premium is figured in to your interest rate.

If you are looking at applying for a conventional loan with less than 20% down you do have options. I would talk to a competent, professional mortgage planner about your options in the beginning of the home buying process so you have the best strategy worked out going in...

Sincerely,
Greg


Sincerely,
Greg
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April 02 2012
"FHA MIP is for the life of loan."
----
Wrong! 

If you are going to answer mortgage questions Bob, please have a clue what you are talking about. 

Thank you!
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April 01 2012
Generally true for Conventional Financing.
Homepath foreclosure loans are an exception.
VA loans are handled differently too.
FHA MIP is for the life of loan.
Call one or 2 of your favorite loan officers for the options and more details.
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April 01 2012
My understanding was that if it is an FHA loan, even with 20% down, one has to pay MI if it is a 30 year loan?

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March 31 2012
yes, if you put down at least 20% you will not have to pay  PMI (private mortgage insurance).
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March 31 2012
 
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