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Old 12-18-2008, 03:31 PM
 
27 posts, read 110,248 times
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HI,

I just entered into the buying Market. I live in katy,TX. Still confused between Cinco and Pine mill.

Can anybody tell me please Is there any mortgage without PMI if I put only 10% down payment?

Thanks in advance.
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Old 12-18-2008, 03:54 PM
 
Location: Visitation between Wal-Mart & Home Depot
8,307 posts, read 38,676,478 times
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I don't know if it is still possible but my wife and I were able to secure a 100% financed 80/20 loan with no PMI.
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Old 12-18-2008, 06:41 PM
 
Location: WA
5,640 posts, read 24,865,542 times
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Typically it takes 20% down to avoid PMI. For a while you could get two loans so that the first was covered to avoid PMI but I am not sure that is possible in this market.
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Old 12-18-2008, 06:43 PM
 
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You can get lender paid mortgage insurance for a higher rate. Or do 80% ltv
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Old 12-18-2008, 08:11 PM
 
Location: Plano, Texas
1,673 posts, read 7,002,177 times
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Quote:
Originally Posted by RK555 View Post
HI,

I just entered into the buying Market. I live in katy,TX. Still confused between Cinco and Pine mill.

Can anybody tell me please Is there any mortgage without PMI if I put only 10% down payment?

Thanks in advance.
Yes, you can do what is called an 80/10/10 loan. That means you have a first mortgage for 80% of the purchase price, a 2nd lien for 10% or the purchase price and you put 10% down. Some states it is very difficult to get a 2nd lien but here in Texas it is no problem. You must have a credit score of 660 to qualify credit wise.

There is also a loan that has Lender Paid Mortgage Insurance. This is a loan that you dont pay PMI, but your interest rate is about .25% to .375% higher and the lender pays the MI for you since they are making more interest.


If you credit score is above 660, do the 80/10/10 loan. If anyone says that is not a good option, let me know and i will show you the difference.

Also, a lot of home owners choose to manage their own money so they dont want an escrow account. When you have an escrow account, you are basically giving the lender 1/12 of your property taxes and 1/12 of your home owners insurance each month. Your lender holds that money for you, then pays your taxes when they are due and your insurance when it is due. If you feel comfortable managing your own money, and you dont need the lender to hold onto it for you, then you will have to do a 80/10/10. If you have one loan for more then 80% of the appraised value you are required to escrow. If you dont think you can manage your own money, then set up the escrow account, cause the last thing you would want is to get a tax bill(and here in Texas since we dont have state income taxes, property taxes are alot) around Christmas and you dont have the money saved to pay it. By the way, assume property taxes are 2.5%, so if buying a 200,000 home, taxes will be around $5000 per year.
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Old 12-18-2008, 08:17 PM
 
3,320 posts, read 5,575,565 times
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Quote:
Originally Posted by cdelena View Post
Typically it takes 20% down to avoid PMI. For a while you could get two loans so that the first was covered to avoid PMI but I am not sure that is possible in this market.
I hope it's not possible now, that's part of the reason "we" got into "this" mess.
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Old 12-18-2008, 08:19 PM
 
Location: Plano, Texas
1,673 posts, read 7,002,177 times
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Quote:
Originally Posted by gold*dust1 View Post
I hope it's not possible now, that's part of the reason we got into "this" mess.

No its not. People doing a first and 2nd lien has nothing to do with the problems in the housing industry.

Instead of just making a statement, can you provide any fact to support it.
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Old 12-18-2008, 08:26 PM
 
28,455 posts, read 84,989,538 times
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I like Victor's detailed take on the process of getting away with 10% and a second mortgage for 10% to avoid PMI.

I think a strong argument could be made to try and scare up the extra 10% or shop for a less expensive place so that your same down payment would constitute 20% or more of the purchase price.

I would hope lenders would also see the value in moving in that direction...
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Old 12-18-2008, 08:28 PM
 
Location: Plano, Texas
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Thanks Chet.
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Old 12-18-2008, 08:57 PM
 
3,320 posts, read 5,575,565 times
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Quote:
Originally Posted by VictorBurek View Post
No its not. People doing a first and 2nd lien has nothing to do with the problems in the housing industry.

Instead of just making a statement, can you provide any fact to support it.
14 years ago we were not allowed to take a second to cover PMI, we just had to pay it. It made us accountable.


When it has been used as a way to make a mortgage possible, it has contributed to the foreclosure rates.
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