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do I have to get the loan with PMI?

I have a question about "prevailing rates, terms, and conditions". Our appraisal came lower but bank still agrees to give up to 95% of the appraised price, but with PMI. My question is am I required to get the loan with  the PMI ? Initially, we promised a downpayment in dollar amount so there will be no PMI. The  loan with PMI and our payment will be enough to cover the sales price.
We have to get a rejection letter from the bank to quit the contract. We are buying a house in Florida from the FHA
  • October 12 2013 - US
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Answers (8)

VA or USDA loans afford you the opportunity to not have PMI. You can also put 20% down to avoid this. Also, once your home hits the 80% LTV you can request a re-evaluation of your loan to get the PMI removed.
  • October 15 2013
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Unless you are a veteran or the home is in an area qualified for USDA financing, which is usually outside of the city limits, your loan has to have mortgage insurance  -  -  unless you put 20% down.  If you want to avoid a higher monthly payment, look into single premium mortgage insurance.  This option is essentially allows you to put 7%-9% down, depending on credit score, without paying monthly mortgage insurance. 
  • October 15 2013
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USDA and VA loans have no PMI up to 100%. I closed both this year in FL. 

I'm confused. your appraisal is low, did you drop the purchase price??  You need to not pay a penny over the appraised value, send your broker back to re-negotiate. If the seller won't drop the price, then you can walk away.  If you had enough $ down at the higher price, that means you'd still have enough  down payment to be <80% loan to value and not need PMI on a conventional loan.   PMI only insures the loan for the lender. It doesn't do you any favors.
  • October 14 2013
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Going Conventional you have several options concerning PMI. You can go single pay premium, split premium, lender paid PMI, or monthly. Your Loan Officer should have gone over that with you. With FHA recently bumping the MMI sky high, I have moved nearly all of my borrowers to either a FNMA or FHLMC loan. The options are clearly better, although the rates are slightly higher, when you factor in the MIP and the MMI of an FHA, it's a no brainer. Let me know if you need any assistance.

Best of Luck!
  • October 14 2013
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There are loans available without 20% down and without paying PMI If you are still considering the purchase and you would like to look I to this option then please feel free to contact me through my profile
  • October 13 2013
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Any loan with a greater than 80% loan to value requires PMI.

Speak with your Realtor or attorney regarding the specific contract you signed.  If you are working with a Realtor more than likely you have a mortgage contingency.  That contingency should have disclosed to the seller the offer was contingent on a specific method of financing.  If you are unable to secure that particular financing, and are unwilling to accept a substitute financing option, you should be able to terminate the contract.
  • October 13 2013
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I think you are asking if you have to go through with the purchase if the house under appraised and your lender will only do a mortgage with PMI? If you purchase agreement has a financing contingency for terms that you cannot now attain (I.e. a loan of 80% of the sales price to avoid PMI), then you should be able Ro be released from your contract. You should speak to your Realtor or settlement attorney for specifics.
  • October 13 2013
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Many Lenders requisting borrowers to pay 20% down payment towards purchasing a real estate property to avoid paying "Mortgage Payment Insurance" The lender is protected, in case of foreclosure, by charging the borrower afee for an insurance policy. The premium may be financed as part of the loan or paid in cash at the close of escrow.

  • October 12 2013
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