mortgage with no pmi and 5% down?

[Anonymous]

We checked with the Maryland State Employees Credit Union and they have 100% financing, but there's a $500,000 purchase price cap and its a 10 year ARM.

[Anonymous]

We did an 80-10-10 on a jumbo, rate below 4%, last year with George Mason Mortgage. That was a refi from the same product 10 months earlier (rate just over 4) with Eagle Bank. They exist for borrowers with good credit. They did want to see that we had a high ratio of cash reserves for the HELOC (maybe 50-75% of the total HELOC balance).

[Anonymous]

HHI $200k and excellent credit scores. Close next month 5% no pmi and paid down interest rate.
Sandy Spring Bank, Navy Federal, and our builder competed to match the first two.

[Anonymous]

I should add- we close next month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would never take a higjer interest rate in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.

You can remove the PMI, but don't you have to refinance? If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%?

Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher.

[Anonymous]

Anonymous wrote:HHI $200k and excellent credit scores. Close next month 5% no pmi and paid down interest rate.
Sandy Spring Bank, Navy Federal, and our builder competed to match the first two.

What rate did you get, with points?

[Anonymous]

Why don't you just call one of the five banks listed here and get rates for yourself?? What difference does it make what everyone else gets when it's all specific to the individual situation (HHI, scores, etc). It's not that hard.

[Anonymous]

You shouldn't have to refinance to get PMI removed, at least on a conventional loan. You can request it at 80% LTV and it must be removed at 78%. Maybe PPs are thinking of FHA or other non-conventional loans?

I was recently able to get a conventional with only 3% down. They are becoming more common nowadays. I do pay PMI but it's not a lot because it's based on my credit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never take a higjer interest rate in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.

You can remove the PMI, but don't you have to refinance? If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%?

Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher.

This is all wrong. You don't have to refinance to remove the PMI. When you hit 20%, you can request the lender drop it - and they have to do so at 22% equity. That could be a combo of you paying down your principal and the house appreciating in value. But whatever the case, your rate is your rate. We're paying 3.62% regardless, with PMI now and without PMI by next year.

[Anonymous]

Anonymous wrote:who offers this type of product? we have great credit, but i've never found a lender not willing to do a loan for less than 20% down without PMI.

Maybe someone posted already- I didn't read all of the responses- but look for LPMI. It is a slightly higher rate (4.5 for me), but I was able to get a mortgage with 5% down doing this. A good agent will know people with a lot more options.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never take a higjer interest rate in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.

You can remove the PMI, but don't you have to refinance? If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%?

Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher.

This is all wrong. You don't have to refinance to remove the PMI. When you hit 20%, you can request the lender drop it - and they have to do so at 22% equity. That could be a combo of you paying down your principal and the house appreciating in value. But whatever the case, your rate is your rate. We're paying 3.62% regardless, with PMI now and without PMI by next year.

Except for FHA loans. I think that's where the confusion is. They changed FHA loans a few years ago to where the pmi is for the life of the loan.

But if you have good credit and can go 5 percent, a conventional loan is far better than an FHA. The PMI is a lot less and comes off when you have 22 percent equity. The lender should be able to pinpoint when exactly that is based on just paying your monthly mortgage.

[Anonymous]

Anonymous wrote:I wasn't able to find this either. I actually had 18% down, credit scores of 805 and couldn't get anything without PMI. The best they could offer me was a higher interest rate which I didn't want.

I was also told that PMI NEVER goes away anymore. You need to refinance once you reach 20% to make it go away.

PMI goes away once you reach 20% equity if you have a conventional loan. It never goes away for FHA loans, unless you refinance. Although, if you have a low interest FHA loan and plan to sell soonish you might want to keep it - FHA interest rates can be inherited by the next buyer and because interest rates are going up, that might be a good selling point.

I don't pay PMI because after credits, tax abatements, seller paid closing, etc, that we used leftover cash at closing to pay down the PMI and I have a conventional loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never take a higjer interest rate in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.

You can remove the PMI, but don't you have to refinance? If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%?

Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher.

This is all wrong. You don't have to refinance to remove the PMI. When you hit 20%, you can request the lender drop it - and they have to do so at 22% equity. That could be a combo of you paying down your principal and the house appreciating in value. But whatever the case, your rate is your rate. We're paying 3.62% regardless, with PMI now and without PMI by next year.

In my experience, the lender is not incentivized for PMI to be dropped. They will lowball your appraisal (that they'll make you pay for even though they choose the appraiser).

You pretty much have to refinance to get PMI removed.

[Anonymous]

We purchased last August for 550k in DC. We did 5% down and the rest at 3.5%, PMI is ~439. The bank offered us paid PMI but interest rate would have been 4.1%

It would have made sense to take it if we plan on selling soon-ish since break even point is 10 years but since the plan is to keep this townhouse as a rental. We hope to drop PMI by 2-3 years if market doesn't crash so would be further ahead financially than taking 4.1% no PMI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never take a higjer interest rate in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.

You can remove the PMI, but don't you have to refinance? If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%?

Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher.

This is all wrong. You don't have to refinance to remove the PMI. When you hit 20%, you can request the lender drop it - and they have to do so at 22% equity. That could be a combo of you paying down your principal and the house appreciating in value. But whatever the case, your rate is your rate. We're paying 3.62% regardless, with PMI now and without PMI by next year.

Except for FHA loans. I think that's where the confusion is. They changed FHA loans a few years ago to where the pmi is for the life of the loan.

But if you have good credit and can go 5 percent, a conventional loan is far better than an FHA. The PMI is a lot less and comes off when you have 22 percent equity. The lender should be able to pinpoint when exactly that is based on just paying your monthly mortgage.

And of Dec 2015, my FHA loan I signed does not have pmi for the life of the loan. The 20% equity clause to have it removed is in my paperwork.