second mortgage, and mortgage insurance

wmoore · Joined: 17 Jun 2008 Posts: 1 1.32 Dollars($)

If I take out a 2nd mortgage and the total of the 1st and 2nd equal the appraised value, will I have to pay Mortgage Insurance premium on the first or second mortgage?
Thanks,
Wes

adonis · Posted: Tue Jun 17, 2008 9:18 pm Post subject:

Welcome Wmoore,

It seems like you are going for 100% financing. In such a case you need not pay mortgage insurance premium. Have you already taken out the first loan? if not, then you may consider making 20% down payment in order to avoid paying for the insurance premium.

brian1 · Posted: Wed Jun 18, 2008 8:13 pm Post subject:

You have not provided enough information to answer the question

It used to be fairly easy to avoid mortgage insurance by splitting your loan into two a 1st and a 2nd. The first could be up to 80% of the value and then the second the rest. If the first exceeds 80% even if you have a 2nd there will probably be mortgage insurance on the first. The problem in todays market is that there are VERY FEW lenders doing high loan to value 2nds and the few that are have extremely difficult guidelines. None that I know of will go to 100%.
This is why the most common loans now are fha and the higher loan to value conforming loans. Both have MI.

Hope this helps
Brian

gmakerley · Posted: Sat Jun 21, 2008 5:23 am Post subject:

based on your original question, wmoore, it seems that you own and have a current first mortgage; and that you're contemplating a second mortgage that will consume all your remaining equity. there are lenders that still exist who will grant secondary financing up to 100% of your value (credit unions, local banks, etc.). in those cases, it is reasonably likely that you would not have to pay a mortgage insurance premium in so doing.

we here are unable to give you specific answers to your question, as we don't know the specific circumstances you face (location, likelihood of credit approval, etc.); but i am hopeful that this is helpful.

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