Does anyone know of any lenders that will give someone with excellent credit a mortgage with little or no down payment. I would like to buy a condo, but I can't amass a 20% down payement that quickly.
RE: Mortgage with low/no down To avoid paying the extra insurance on the loan for having less than a 20% downpayment.
RE: Mortgage with low/no down Is there any way I can avoid the extra insurance without a 20% down payment?
RE: Mortgage with low/no down Kim is right, unless you put 20 % down, you must carry insurance until you have enough equity in your home to drop the insurance, I am not sure, but I don't think you can get around the PMI, with less than 20% down
RE: Mortgage with low/no down If you have never had a mortgage before, there are a number of programs that will pay your closing cost and down payment for a first time buyer. Or you can go through the FHA program where you only need 3% down. Hope this helps
avoiding mortgage insurance You can get a piggy back loan (a second mortgage) Here is an example: Say the price is 100k. You put down 5% or 5K. You have a mortgage for 80% or 80k. You have a second mortgage (15 years) for 15% or 15k. This means you have two payments per month. Generally the monthly payments total the same or less than what you would have paid with an 95% mortgage with mortgage insurance. But instead of the extra money going towards mortgage insurance (which is of no benefit to you), the extra money goes towards building equity. Note: The minimum downpayment in this situation is usually 5% and this cannot be used in conjunction with an FHA (at least that is what the mortgage brokers have told me). The interest rate on a second mortgage is higher than on the first, and the term on the second mortgage is 15 years. This is probably what I will be doing when I buy a house. (Unless I have some huge windfall) - Don't we all wish
RE: avoiding mortgage insuranc What is to stop somebody from saying to a lender that the property they want to buy is 125% of the actual cost so they get a 100% mortgage? Or get another loan for the down payment? I suppose that is why they do the second loans.
RE: avoiding mortgage insuranc The 20% calculation to avoid mortgage insurance (PMI) isn't based on what the buyer or seller says is the price of hte house. It's based on the value of the house as determined by a professional appraiser. The appraisal is required and is performed after a purchase contract is signed. You should check out www.fool.com and or www.quicken.com and follow their personal finance/mortgage links. They explain step by the step the process involved in buying a house. They will probably answer all of your questions.
