Zillow Advice: Buying Process - do i really have to pay PMI plus sur charge if i dont put 20% down

This is a required insurance ...

Fri, 26 Jun 2009 19:12:00 GMT

This is a required insurance policy for your loan since you are not paying 20% down. How about doing a concurrent second mortgage for the amount that you need to get your first to 80%? That would elimiate your insurance policy, but you'd need to do the math to see if your increased interest on the 2nd negates the savings....6 of one - 1/2 dozen of the other. Your RE Agent can help with strategies on purchasing and if you need anything from a 3rd party, CANDID no BS Agent, shoot me an email and I'll reply.

Yes, PMI (FHA/VA) / ...

Wed, 24 Jun 2009 06:10:00 GMT

Yes, PMI (FHA/VA) / MIP (Conv., Other) is paid if you are over 80% LTV. As far as a Surcharge, that is a new one.

Its hard to grasp, but it just as much for you as it is for the lenders. When the premium is paid on a monthly basis, it, of course, covers the 20% of debt that may be uncollectible on a loan. In case of a default, this gives the lender a leway to recover loss. You want to the lender to recapture as much as possible in case of a default, so your definciency is less.

Is that surcharge they're ...

Wed, 24 Jun 2009 05:18:00 GMT

Is that surcharge they're trying to charge you permanent in the loan Grumpy?

In the days of the dinosaur, ...

Wed, 24 Jun 2009 02:34:00 GMT

In the days of the dinosaur, you couldn't get a mortgage unless you put 20% down. Mortgage Insurance was created in the early '70s, allowing conventional lenders to loan over 80%. Mortgage Insurance protects lenders against defaults on the portion of the loan that is financed over 80%. MI protects the lender because statistics show that you are more likely to walk away from your home if you do not have a 20% equity position. These days, the most common way to finance a home with conventional financing is with mortgage insurance. There are a few self insured products out there, but the higher rates associated with those products are a trade off for the risk. MI companies are limping along in today's economy and it may be difficult to even get MI if you don't meet the FICO scores and Debt to income ratio guidelines.