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Under the Homeowner's Protection Act, your mortgage lender is legally required to cancel your PMI coverage once you pay down your mortgage to 78% of the principal, as long as you are current on your payments and do not have an FHA loan.
poor economy so people can't afford to buy houses.
IMO the economy is doing fine, it is just that land is expensive.
It isn't as if the cost of building a structure is all that much, in my opinion -- but go look at buildable infill lots in any town or city of any size, the cost is astronomical.
The 25% down payment requirement for most mortgages is what keeps most people from buying their first home, thereby decreasing demand and keeping the prices lower. When anyone could get a mortgage with 10% down there was a buying frenzy which raised prices, especially as the interest rates got lower.
A 25% downpayment is easy, qualifying for the 500000-1000000+ dollar 2 bedroom house isn’t.
A 25% downpayment is easy, qualifying for the 500000-1000000+ dollar 2 bedroom house isn’t.
Wait, so you're saying that saving $125,000 - $250,000 on a downpayment is easy for you?
I just want to make sure I understand your comment correctly, because to me, qualifying for a $300k mortgage (which is how much it generally costs in my area) is easy for me. It's trying to save $75,000 that I'm finding difficult.
Wait, so you're saying that saving $125,000 - $250,000 on a downpayment is easy for you?
I just want to make sure I understand your comment correctly, because to me, qualifying for a $300k mortgage (which is how much it generally costs in my area) is easy for me. It's trying to save $75,000 that I'm finding difficult.
Houses haven’t been 300k here since I was a baby. They were 10-15k in 1960. The downpayment i could pay without batting an eye. It’s not that hard to save up say 75k (for the 300k mortgage). I’d feel very lucky to be in your shoes instead of being forced into poverty like I am despite having 180k.
The point is the downpayment is easy for some people, qualifying is much harder even with an 800 credit score because the houses are so insanely priced.
I believe that 25%requirement is not true. People are back to buying first houses with far less.
PMI still holds true and now is for the life of the mortgage not just until you hit 20% equity.
I never knew of a 25% requirement either. I always heard that 20% is recommended and will keep you from paying PMI.
We bought our first and only home with 3% down as part of a first time home owners program back in 2010. Next month marks the 7 years in our home. As far as I know that is still available here in our area. I don't know how people do it though. When we bought prices in our neighborhood were in the high $200's to mid $300's for an older home. Today prices are in the low $500's. Two homes on our street sold this year for over $500.
I know they changed things after we bought our home. For us the PMI drops off when we have paid off 20% of the original sales price and we are getting close to that now.
In todays world I would not qualify or want to buy where I live.
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