PMI - Post Menst... no, must be private mortgage insurance

By
Home Inspector with 203kOnLine.com, covering California & most other states S0289
http://activerain.com/droplet/54YP

While FHA does have one of the lowest down payments in the industry it comes at a price. There is up front and monthly PMI or Private mortgage insurance that stays with the loan for quite a while.

Many are getting into homes with that 3.5% down payment only to find the PMI is eating them alive. Last I checked there is up front PMI that can be rolled into the loan, and monthly PMI was .85%, sounds innocent enough but on a $636,000 mortgage amount that might mean an additional $450 per month and that can be an alligator. Especially if you are buying rental property. This additional $450 per month could be like having another unit.

Private Mortgage Insurance isn't to protect you with regards to your mortgage. It is there to protect HUD/FHA against their losses. The lender is guaranteed that their money is safe up to 96.5% therefore they need to collect 3.5% down payment so they are 100% whole in the case of a default.

Most 203k buyers or refinancing clients would refinance once the work is completed. Quite often the same lender that made the loan in the first place will attempt to refinance that loan for you.

 

 

 

 

 

 

 

 

 

 

downtown

Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

Skype name: the203kconsultant

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Location:
California Los Angeles County Agoura
Groups:
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Century 21 Network
RE/MAX Active Rain Bloggers
Coldwell Banker Group
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