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Why does it have to be 20% for downpymt.Why can it be less %?

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July 06 2010 - Wildwood Park
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FHA & Conventional loans both offer less than 20% down payment options.  With conventional loans you would need to obtain PMI (Private Mortgage Insurance) which insures the lender for a portion of the loan amount in the event there is a default.  Due to the large number of deafults the past few years PMI became extremely difficult to obtain and the premiums were so high that it really only made sense to obtain and FHA loan if you were putting less than 20% down.  Today PMI is starting to make a comeback and for the right situation can be much less expensive than an FHA loan.  FHA also requires Mortgage Insurance (not PMI , it's just called MI because FHA is self-insuring...not using a Private company) and is broken into two parts:  an upfront premium and a monthly premium.  Bottom line is, there are options for less than 20% down.
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July 07 2010
Carl is correct. Depending on whether you are an owner occupied or not, your downpayment can be as low as 3.5% for an FHA loan if you plan to live on the property.  Please clarify your question.

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July 06 2010
Dear Flinston,
Your down can be lower, if you qualify for FHA financing.
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July 06 2010

If you are buying an investment property 20% in the minimum down payment. If you are purchasing an owner occupied property you may have many other options as low as 3.5% down using FHA.  More details of your transaction would be needed to give you other options.

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July 06 2010
 
Related Questions
Why does it have to be 20% for downpymt.Why can it be less %?
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July 07 2010 | 4 answers
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