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Old 04-21-2008, 11:30 AM
 
271 posts, read 984,189 times
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I'm looking into buying a house (first time) and i'm confused about a few things. I know alittle about what PMI is but i have some questions.
I understand that if you put down 20% on a house you are not required to have PMI, is that correct?, If so, then does that apply as well, say if you buy a house that is valued at 300,000 and you purchase it for 20% off, does that mean you don't need to have PMI?

My next question is, is there a way to get cheaper PMI, can one shop around for PMI?, or is it set by the lender?

And lastly, how does one figure out how much the PMI and property tax will be?, is it a percentage of the house value?, How does that work?

Any information is appreciated.
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Old 04-21-2008, 12:04 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,391,475 times
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1. No. For all intents and purposes purchase price is market value. You could have it reappraised in a couple of years though and if the value comes back sufficient then you can request that the PMI be dropped.

2. You can shop for PMI. It is kind of a difficult process, however, which is why most people leave up to the lender. The lender is not allowed to require you to use third parties though, so you can shop for your hazard insurance, PMI, even your title settlement services.

3. MGIC (Mortgage Guaranty Insurance Corporation) This will give you a rough idea of what to expect. Click on rate finder and enter your specific information. As far as taxes go you can check Zillow.com to find that annual tax of a particular house, or you can check your local assessor's website, find out the assessed value of the home you wish to purchase and the tax rate of your locality and calculate that way.
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Old 04-21-2008, 12:11 PM
 
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Thank you.
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Old 04-21-2008, 02:14 PM
 
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you can also do LPMI wich is a lender paid, you take a little higher % but can be worth it,??? OR you can do up front LPMI wich is a up front fee you pay on a fha loan and is rolled into your loan amount, can be a lot
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Old 04-21-2008, 02:30 PM
 
Location: Charlotte, North Carolina
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Look into an FHA loan as their PMI factor is 0.5%
You're only required to put 2.25% as a down payment
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Old 04-21-2008, 03:29 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,391,475 times
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Quote:
Originally Posted by ajpacino View Post
you can also do LPMI wich is a lender paid, you take a little higher % but can be worth it,??? OR you can do up front LPMI wich is a up front fee you pay on a fha loan and is rolled into your loan amount, can be a lot
Actually LPMI is only worth it over the short term. Over the long term PMI can be dropped, but you are stuck with the higher rate with LPMI. You can also pay for MI upfront. However, with an FHA loan you are required to pay an upfront mortgage premium as well as the monthly mortgage insurance, so your description is a little off.
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Old 04-21-2008, 03:31 PM
 
Location: Charlotte, North Carolina
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still less than LPMI and PMI
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Old 04-21-2008, 04:21 PM
 
271 posts, read 984,189 times
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Quote:
Originally Posted by renriq02 View Post
Look into an FHA loan as their PMI factor is 0.5%
You're only required to put 2.25% as a down payment

So do you calculate 0.5% of the purchase price, and you pay that monthly?
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Old 04-21-2008, 04:22 PM
 
Location: Charlotte, North Carolina
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off the loan amount

Quote:
Originally Posted by fresnochick View Post
So do you calculate 0.5% of the purchase price, and you pay that monthly?
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Old 04-21-2008, 06:09 PM
 
Location: CNJ/NYC
1,240 posts, read 3,771,572 times
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Quote:
Originally Posted by fresnochick View Post
So do you calculate 0.5% of the purchase price, and you pay that monthly?
Loan amount x 0.005 / 12. That will be your monthly MIP (as FHA terms it) payment. Don't forget that with FHA you will have a 1.5% of the total loan amount MIP payment upfront due at closing: payment for the privilege of having an FHA loan.
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