Posted on: 17th Jun, 2008 11:29 am
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
thanks,
wes
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.
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.
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
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
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.
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.
We are considering loaning an individual some money and putting a lein on the equity in his property and I was wondering if there is a mortgage insurance that we can purchase in case of default on the loan.
mortgage insurance companies have lengthy relationships with the lenders they deal with, and they wouldn't be interested in being involved with an individual on an individual loan.
you can protect yourselves pretty well by determining what the current market value of that home is, finding out how much they currently owe to any lenders, and determining if there are any other liens on the property.
you can do the latter by hiring a title searcher.
it's apparent, however, that you have a level of trust with the individual already, inasmuch as you're even contemplating the loan. you need to be safe, however.
you can protect yourselves pretty well by determining what the current market value of that home is, finding out how much they currently owe to any lenders, and determining if there are any other liens on the property.
you can do the latter by hiring a title searcher.
it's apparent, however, that you have a level of trust with the individual already, inasmuch as you're even contemplating the loan. you need to be safe, however.
The questions is very interesting.
How will a seller who finances a buer protect him/her self by coverign with some kind of PMI?
Is there some thign like that in the market?
Does any of the big insurance companies offer this?
How will a seller who finances a buer protect him/her self by coverign with some kind of PMI?
Is there some thign like that in the market?
Does any of the big insurance companies offer this?
see my earlier reply geni
But that applies for today. What about in a situation where the value fo the property drops and you do nto want the property.
an owner financing a property needs to make sure there's a decent down payment. there is no mortgage insurance available for a private individual.
the mi companies do business with national, recognized lenders.
the mi companies do business with national, recognized lenders.
Thank you George.