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Where can I find an 80/20 mortgage or a 20/75/5 so I can avoid PMI?

  • December 16 2008 - Stoneham
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Answers (15)

Best Answer

Karen,

I am based in Woburn MA.  My wife grew up in Stoneham. 

I just found out that this type of financcing actually does exist in MA.  I personally do not have the ability to offer the program, but would be happy to refer you to a loan officer that does.  The program is a CRA program with one of the larger banks in the area.  I wish I could offer it.

If you would like more information I can put you in touch with a loan officer that can assist you.

Why would I mention this program and not be able to offer it for 2 reasons.

1. The sooner the money that they have sent aside is used the sooner I will not loose loans to it.
2. I actually do believe in doing what is best for the client, if you qualify for the program it is the best deal you will be able to find.

If you are interested feel free to contact me through my profile.
  • December 17 2008
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I don't think too many lenders are going to 100% loan to value on 2nd mortgage anymore.  That could be tough to do now.

Refinance Information
  • December 17 2008
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Mortgage insurance is tax deductable now, and you can likely qualify for a higher loan amount (if you want to), with mortgage Insurance included in your payment.  It used to be that we did 80/20's to avoid MI, but it was not tax deductable at that time (till 2008), and your payment is usually less with today's low MI rates than it would be if you did an 80/20.  Also, the 2nd is harder to come by now, unless you have stellar credit. 

Another option is to do an FHA loan. 3.5% down is all that is required, and that can be gifted from a family member (if you are lucky enough to have someone who can gift this to you!) The rates are great today on mortgages, and the MI factor for an FHA loan is lower than if you went with a conventional loan.  I am able to help with FHA loans, or conventional financing in Oregon and Washington. If you are buying or refinancing in one of those states, give me a call!
  • December 17 2008
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I would try your local credit union
  • December 17 2008
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I have heard of some smaller local banks offering this program due to them keeping the loans and not selling them.
  • December 17 2008
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Profile picture for kathleen.borucki
These loans no longer exists.  One of the other posts suggested FHA or Rural Housing.  This is a great suggestion.   You have to be careful with less than 20% down convnetional loans as you have to meet minimum requirment for FICO in order to get PMI.  FHA is more flexible.  Like a forgiving golf club, so to speak.  Plus you can get up to 6% seller concessions that will cover most of your costs to close.  Your required investment up until December 31, 2008 is a minimum of 3% of the purchase price.  As of January 1, 2009, it raises to 3.5%.  \

Kathy Borucki
Senior Loan Center Manager
kathleen.borucki@flagstar.com
www.flagstarloans.com/kborucki
  • December 17 2008
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Hi Karen,

I am based out of Stoneham MA and there are actually piggyback loans still available out there but the only issue is that most lenders that still offer this format will not go above 85% LTV when going with two loans.  If you are at 85% LTV or less I could get you into a piggyback with great rates but unfortunately if you are above 85% I think that you are going to have to go with one loan.

Rates are the lowest I've seen in my career right now though so even if you do have go with PMI or LPMI you should be able to lower your payment dramatically just by getting lower overall rate.  If you do have to go with one loan and decide to try and move forward on this I would ask whoever is providing you with the pricing to show you both PMI&LPMI so that you can compare the payments.  If the LTV is really high then LPMI will most likely not be available in MA though.

Hope this helps you out in some way, if you would like to discuss your situation in person don't hesitate to call or email me and I will be happy to help out in any way that I can.

Best Regards,

Lance Richards
Senior Loan Officer
Vision Mortgage LLC,
106 Main St.
Stoneham, MA 02180
781-760-5090 Cell
781-279-1820 X 224 Office
781-279-5180 Fax
Lance@visionmortgagema.com

  • December 17 2008
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It says Stoneham Mass above the post. Is that where you are Karen? I am still getting used to this new format
  • December 17 2008
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There are no 80/20 or 75/25 loans anymore.  There are only options to avoid PMI at 90%.  So if you don't have 10% down try an FHA loan where the MI is less than on a conventional loan.  There really are no 100% loans left except for certain, particular instances.
  • December 16 2008
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If your home is considered "rural" USDA has programs out there. Check this site to see if your state/county are recognized by USDA. Also, income limits are part of the program.
http://www.usdaloanapproval.com/USDALoanlimits.html

80/15/5 do exist in Texas, however, guidelines/requirements are strict.
FHA is the best way to go if your looking for a minimal downpayment and lower MI.
  • December 16 2008
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I think they exist in Texas.
  • December 16 2008
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in 2005 thats where you can find them...
  • December 16 2008
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would you rather have those type of loans back and pay a 14% interest rate on your second or just pay the PMI on an FHA loan with a rate around 5%? Do the math first. It might be better for you to pay PMI.
  • December 16 2008
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To the best of my knowledge that loan structure is no longer available in MA.
  • December 16 2008
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Profile picture for GMerino
Kwalson,

Are you purchasing a home?  PMI is not going to avoidable.  I know in AZ/UT PMI is a must for loans above 80%.  I do have a lender that will do a split MI upto 95% in areas that are not considered declining.  I hope this helps.
  • December 16 2008
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