Zillow Advice: Mortgage - what is mortgage insurance? Does anyone who puts down less than 20% have to pay the premium? http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ Zillow Advice | Zillow Real Estate In most cases, the answer ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ In most cases, the answer is yes, you will have to pay either PMI (private mortgage insurance) or MIP (mortgage insurance premiums) if you put less than 20% down on a purchase of a home. PMI is for convetional mortgages, and MIP is for FHA mortgages.<br/><br/>There are a couple of cases where you don't have to pay PMI or MIP - they are USDA Rural Development loans and VA loans. For USDA loans, you do not have to put any money down, but the address of the property must qualify and you must meet income guidelines. Also, there's a 3.5% Funding Fee, but that can be rolled into the loans.<br/><br/>For VA loans, you must be military (active or reserve), National Guard, or a veteran. Again, you do not have to put any money down. But, there's a funding fee which varies according to type of service. Mon, 03 Jan 2011 16:24:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2011-01-03T16:24:00Z Another option to consider ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ Another option to consider is putting lass than 20 percent down and buying out the mortgage insurance with a lender credit or having the seller contribute a closing cost credit to offset the cost. Sun, 02 Jan 2011 21:16:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2011-01-02T21:16:00Z It is always better to find ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ <p>It is always better to find out how much it will add to your monthly payment. If you can buy a cheaper house to have the 20 percent and avoid&nbsp;it, it is something to factor.</p> Sun, 02 Jan 2011 18:22:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2011-01-02T18:22:00Z In some market areas it is ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ In some market areas it is possible to put 5% or more and obtain a second lien-purchase money trust on a conventional loan. With the lower MI credit score driven options, it makes sense to compare those programs including up front MI. When available, second lien lenders have restrictions so that not everyone would qualify, and the rates are 2-4% higher than first lien rates. The total payment though usually comes out $50+ less monthly than other options. Sat, 01 Jan 2011 01:49:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2011-01-01T01:49:00Z What Lara says is true, but ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ What Lara says is true, but if the market takes a huge increase in the next few years your equity in the home could rise above the 20% quickly. Since the market is so low it is poised to do so if all things work as we all hope they do in the future. You will need to have an appraisal done to be able to show the bank that your equity is high enough to let them allow the elimination of the PMI. Fri, 31 Dec 2010 21:37:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2010-12-31T21:37:00Z Lara's answer was perfect. ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ Lara's answer was perfect. The only thing I will add is that at some point the market will come back up and if/when it does, when you feel like you have 20% equity -- if it is before your scheduled payments -- you can successfully get rid of the PMI if you can show you have 20% equity, usually by an appraisal. Fri, 31 Dec 2010 21:34:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2010-12-31T21:34:00Z Hi there,Yes, Private Mortgage ... http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ Hi there,<br/><br/>Yes, Private Mortgage Insurance, PMI, is generally required by lenders if you're putting less than 20% down on your home purchase. It's basically extra protection for the lender in case you should default on your mortgage. The good news is that you're building equity as you make your monthly payments (albeit slowly on a 30-year loan) and when you get to the point where your equity equals 20% you no longer have to pay PMI.<br/><br/>Hope that helps -- if you have further questions, feel free to get in touch -- I'd be happy to help.<br/><br/>Happy New Year!<br/>Lara Fri, 31 Dec 2010 21:26:00 GMT http://www.zillow.com/advice-thread/what-is-mortgage-insurance-Does-anyone-who-puts-down-less-than-20-have-to-pay-the-premium/379150/ 2010-12-31T21:26:00Z