Posted on: 16th Jan, 2009 12:16 pm
Hi, we are thinking about having a bouse built, we need an end loan. the house will be 249900 and we can put only 25,000 down, I would like to avoid PMI and obtain a decent rate. I know I'm asking for the world...any ideas?
Yes, you can get a loan with what is called LPMI which essentially means this...
Instead of paying PMI, some lenders offer an option to increase your interest rate instead of paying PMI. Sometimes the payment is a little lower using this method. Plus, the additional interest would be written off on your taxes when PMI could not. However, recently there were some changes to how PMI payments are handled on your tax returns. Check with your accountant to see how this would impact you in your state....then make an educated decision.
Instead of paying PMI, some lenders offer an option to increase your interest rate instead of paying PMI. Sometimes the payment is a little lower using this method. Plus, the additional interest would be written off on your taxes when PMI could not. However, recently there were some changes to how PMI payments are handled on your tax returns. Check with your accountant to see how this would impact you in your state....then make an educated decision.
LPMI is tough to find these days is worse for you in the long run and will not get you low rate.
There are 2 choices w 10% down, Conventional and FHA (in fact with FHA you only need 3.5% down)
You should be able to get market rates with either but PMI is unavoidable.
PMI is lower on FHA but you have upfront PMI and rate may be a tad higher then conventional.
You should have your lender show you both options and decide what is better for you and whether or not it will fit your budget needs
Make sure you talk to a lender you trust.
Compare to make sure you getting good deal.
There are 2 choices w 10% down, Conventional and FHA (in fact with FHA you only need 3.5% down)
You should be able to get market rates with either but PMI is unavoidable.
PMI is lower on FHA but you have upfront PMI and rate may be a tad higher then conventional.
You should have your lender show you both options and decide what is better for you and whether or not it will fit your budget needs
Make sure you talk to a lender you trust.
Compare to make sure you getting good deal.
to piggyback on eugene's post...i thoroughly agree that mortgage insurance is a given. one good thing about MI is that you can deduct the payments, just as you can deduct interest on the mortgage loan, on your federal taxes.
i find that rates are pretty comparable between conventional and fha loans, and credit score makes a decided difference. fha is far more forgiving of low scores than either fannie or freddie; so considering an fha loan is perfectly appropriate.
the best thing that eugene said is "make sure you talk to a lender you trust." that ought to be on every post on here, probably.
i find that rates are pretty comparable between conventional and fha loans, and credit score makes a decided difference. fha is far more forgiving of low scores than either fannie or freddie; so considering an fha loan is perfectly appropriate.
the best thing that eugene said is "make sure you talk to a lender you trust." that ought to be on every post on here, probably.
