need help- may be posted twice - Posted by mike

Real Estate Investing Real Estate Financing
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Posted by Kim-OH on April 02, 2005 at 14:58:18:

Hey all correct me if I’m wrong, but isn’t PMI usually about a quarter of a point? When the borrower reaches the magical 80/20 one can have the PMI removed isn’t that correct? The magical 80/20 can be one of the following: pay the loan down by 20% or if appreciation is good get another appraisal and if it appraises at or above the 80/20 level PMI may be dropped.

On the 80/20 loans isn’t the interest rate on the 20% usually considerably higher? If so does this mean that one has to figure out the 1/4% payment (PMI) on the total borrowed vs the higher interest rate on the 20% borrowed?

Help me out here and thanks!!!

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need help- may be posted twice - Posted by mike

Posted by mike on March 29, 2005 at 02:11:22:

I found a bank that will give me loan for my first home. But because my FICO score is 570 they’re adding in an additional $185 per month for private mortgage insurance. They said I have to pay this unless i had a score above 650. Is this normal or is there a way around this?

Thanks

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Re: need help- may be posted twice - Posted by john

Posted by john on March 29, 2005 at 07:35:15:

Some lenders require this PMI unless you have a 80% loan to value.
Easiest way around this is:

  1. put 20% down
    2 find lender that doesn’t require it,but you will have a higher rate
  2. Get creative on the 20% maybe seller or private finance
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Re: need help- may be posted twice - Posted by Drew

Posted by Drew on March 29, 2005 at 08:07:16:

Isnt the whole reason behind the 80/20 loans is to avoid PMI??

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Re: need help- may be posted twice - Posted by john

Posted by john on March 30, 2005 at 06:32:49:

Sorry I forgot about a 80/20 Loan