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We both have excellent credit scores: 799 and 757, stable jobs with good income, 80k in the bank...looking to purchase a home for 434,000 in VA (desired area) with only 5% down (we can put 10% down but we rather leave it in the bank), and we want to avoid paying the PMI. We just spoke to a lender yesterday, and he said that this is going to be a problem, despite our credit score and income. He gave us a good rate for a 90% loan without PMI.

My question is:

should we keep shopping around, or is a 5% down loan without PMI a thing of the past?

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi karol,

Welcome to the forum.

If you pay less than 20 percent as down payment then you may need to pay the PMI. But if you want to pay only 5 percent as down payment and also want to avoid PMI then you may have to pay higher interest. So, shop for lenders who can be ready to offer you this type of program.

You can also get No-obligation free consultation from our community lender to know whether you can get a loan with 5% down loan without PMI

Feel free to ask if you have any further questions.

Best of luck,
Larry

gmakerley · Posted: Fri May 23, 2008 8:02 am Post subject:

karol, you can, indeed, find a loan without mortgage insurance while putting only 5% down.

for the most part, it is required; but there are lenders who can assist you in that area. you'll find the interest rates higher, i am sure.

there is also Lender Paid MI. this will also cost you a premium - not necessarily in the interest rate, but as a point or a fraction of a point (fee due at closing).

with the scores you noted, you would not be likely to find it difficult to avoid the mortgage insurance that you would ordinarily pay.

chrisburns · Posted: Fri May 23, 2008 8:13 am Post subject:

FHA offers extremly low MI to borrowers. Other programs that have no MI include either VA or the USDA Rural loans if your income and area qualify.

The bottom line is that MI is tax deductible now so it should hurt a lot less than it has in the past.

Posted: Fri May 23, 2008 7:15 pm Post subject:

George, I'm curious which MI company is offering under a point for 95% LPMI. Best I've found was 1.15 -- mix and match with rate, of course.

Maybe it's time to switch MI companies!

Posted: Fri May 23, 2008 8:19 pm Post subject:

Yes, there are mortgage companies that offer no pmi mortgage loans. The rate is usually a little higher. It really depends on how long you plan on being in the home. If it's less than 5 years I would go with the no pmi option. It will work out in the long run with the PMI since you can have it removed when you don't owe more than 80% of the home's value.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Yes, there are mortgage companies that offer no pmi mortgage loans. The rate is usually a little higher. It really depends on how long you plan on being in the home. If it's less than 5 years I would go with the no pmi option. It will work out in the long run with the PMI since you can have it removed when you don't owe more than 80% of the home's value.

gmakerley · Posted: Sat May 24, 2008 4:16 am Post subject:

was that you, lisa, that asked about the pmi being under a point?

i'm reviewing my own rate sheet, which has add-ons for lpmi (that's the product i was discussing), and said add-ons are less than a point; depending on ltv and credit score.

Company	Loan Type	APR	Est. Pmt.
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Any chance of getting a 5% down loan without PMI?