Question about Mortgage and Mortgage insurance

I and my wife are working couple with excellent score 750+. Currently we have been renting since last 4-5 years with no issues with paying our bills, credit card payments, rent etc. Currently we have zero debt. We are looking to buy a townhome in NJ which is around 350K. Issue is we have only 10% money for downpayment, and I am quite sure we can pay the 10% more within 1 year.  What is the best option for us ? The quote we have got from our bank (bank of america) has per month insurance premium because of lower down payment. What are our best options ?

 
  • March 28 - Marlboro
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Answers (6)

Thank you for providing me with helpful information regarding your scenario. Being that you and your wife have good credit, it opens your options tremendously; a down payment with as little as 5% can waive/eliminate the mortgage insurance (PMI). Of course a 10% down payment is fine as well and comes with a no mortgage insurance option. This is why it's of utmost importance that you speak with a knowledgeable mortgage professional, such as myself, who thoroughly understands the many loan programs available to best suit your needs. 

It would be best for us to speak so we can further discuss the townhome you're interested in, weigh-out all viable payment options, and determine which makes most sense for you and your family. Please contact me at your earliest convenience so we may create a plan of actions. My contact information may be found within my profile.


Kind regards,

Paul F. Marzolla
Sr. Mortgage Consultant
____________________

Licensed by the New Jersey Department of Banking
NMLS#922891
  • April 09
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Please look me up through my profile, I am a local NJ licensed mortgage banker about 15-20 minutes away from you.  I would be happy to give you your options with the Pro's and the Cons.

Thanks,Dave-
  • March 29
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There are pros and cons to about 3 different options that you have with a 10% down payment.  If you would like to contact me through my profile, I can provide a nice side by side comparison so you can make an educated decision
  • March 28
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I would suggest you get a couple of quotes, mortgage insurance will need to be paid or if you choose the lender paid mortgage insurance - would eliminate mortgage insurance but you would take a higher interest rate. 

  • March 28
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With less than 20% down, you will likely pay a premium in one way or another. Some lenders will advertise "no pmi" at 10% down, but you are paying a higher rate in order to receive the loan. If you are indeed going to pay the extra 10%+ within a year, you should not choose this option. PMI will drop off once you get to 78% loan-to-value, so you will only have a year or so of monthly mortgage insurance payments. If you choose a higher rate to avoid PMI, the rate will remain high for the life of the loan. 

It is not necessarily a Bank of America specific option, most lenders will require PMI with less than 20% down. Get a few quotes from reputable mortgage professionals and choose the best option for you and your wife in the long run (it may have PMI or it may not). 
  • March 28
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Call a smaller bank besides Bank of America and Run the loan scenario passed them.
  • March 28
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