Posts

“PMI” or “Private Mortgage Insurance” Explained (Briefly)

PMI remains a great option for high-LTV financing in 2019, and all too many borrowers and agents do not fully understand how it works. First of all, PMI protects lenders (not borrowers) in the event of default. So borrowers with PMI will still be on the hook or liable for their mortgage debt even after […]Read More

How Much Are PMI Payments? How To Estimate Your PMI

Most everyone knows that buyers who put down less than 20% usually have to purchase Private Mortgage Insurance or PMI. But most people also have no idea how much PMI payments are. PMI payments can be made monthly, in a lump sum at closing, or as a combination of the two. Most of our borrowers […]Read More

Prime Rate Up; HELOCs Up; PMI Down

Prime Rate was 3.5% last year at this time. Currently the Prime Rate is 4.25%. It has been climbing steadily with every increase in the Fed Funds Rate. Prime Rate is the interest rate that large companies pay to borrow funds for short periods. It matters to real estate b/c Home Equity Lines of Credit […]Read More

Unison – 10% Down Payment Assistance For Small Share of Appreciation

Unison contributes 10% of the purchase price or more to help buyers increase purchasing power, to save cash for other uses, to avoid PMI, or to reduce payments in order to lower debt ratios or just save money. Unison does not charge interest or any payments, but only takes a small percentage of the appreciation […]Read More

The Case for Private Mortgage Insurance; PMI Is a Great Option Now

Private Mortgage Insurance (PMI) for buyers with less than 20% down has been much maligned for all too long. PMI is now, however, so much more competitive that it is often a far better option than the two highly touted alternatives: Lender Paid Mortgage Insurance (LPMI), and 80/10/10 (1st and 2nd mortgage) financing. PMI is […]Read More

Arch Mtg Ins; MUCH Cheaper; Algorithms

Today’s Blog is about Private Mortgage Insurance, normally a boring subject, but now fascinating for a few reasons. First, Arch MI is now available for strong borrowers as a fantastic alternative to traditional PMI, FHA financing, and 80/10/10 (1st/2nd Combo) financing. Arch MI is much, much cheaper b/c they use algorithms to calculate risk and […]Read More

Dow Hit Record High; Getting Out of PMI

A borrower recently called us to discuss his refi options. He had a 30 year fixed rate loan at 3.5%. He also had PMI that he wanted to eliminate b/c he now has substantial equity in his Bay Area home. As much as we wanted the refinance business, we told him not to refinance but […]Read More

Piggybacks or Second Mortgages In Lieu of PMI/Jumbo (Again)

We addressed the return of piggybacks or first/second Combo loans a few weeks ago, but we have been taking advantage of them so much that we thought the topic warranted re-addressing. Once again, second mortgages (“piggybacks”) that fund concurrently with a first mortgage completely dried up in 2008. They have returned in recent months and […]Read More

PMI is NOT Permanent; Getting Out of PMI

FHA currently requires Mortgage Insurance for five years no matter what, and in June FHA MI will become permanent (for the life of the loan). This is why conventional financing with Private Mortgage Insurance (PMI) is often a better route. Several borrowers, however, recently told us they thought PMI was permanent too. It is not, […]Read More

Appraisal Comes In Low; Seller Won’t Budge; 90% Becomes 95% LTV

Because the market is so “hot”, sellers are refusing to budge on contract prices when appraisals come in low (sellers believe other buyers are waiting in the wings that will pay full price). In this situation, buyers simply have to come in with the extra funds to make up the difference between contract price and […]Read More

90% LTV w/No PMI Is Not That Great; Take PMI Instead

We continue to have borrowers get all too excited about 90% loan-to-value loans with “no PMI” (after seeing advertisements from lenders). Borrowers have a real aversion to PMI, but we continue to discourage “no PMI” loans b/c they are not as advantageous as they seem. As we have explained before, lenders simply offer a higher […]Read More

Buying Condos With Little Money Down; PMI More Flexible Now

We frequently tout low down payment Condo purchases as an alternative to FHA. For loan amounts under $417,000 – buyers need as little as 3% down. For loan amounts above $417,000 (up to $625,500), buyers need 10% down. The big concern, however, for low-money-down Condo financing has always been Private Mortgage Insurance (or PMI). We […]Read More

Appraisal Comes in Low – Increase LTV and PMI to Make Deal Work

The current “hot market” results in purchases with prices that simply cannot be supported with appraisals. And because sellers often refuse to come down in price when an appraisal comes in low, we often propose the “solution” of simply increasing the loan-to-value ratio and PMI rate to save a transaction. For example: If a borrower […]Read More

3% Down Conventional – Alternative to FHA; Single Payment PMI

Several of our lenders are touting their 3% down alternative to FHA. The Monthly PMI rate for these 3% down loans is 1.15% (same as FHA’s), but there is NO up front PMI (FHA has a 1% Up Front MI fee). In addition, the down payment requirement is lower by 1/2 of a percent, and […]Read More

Getting OUT of PMI and MI?

We have many borrowers with both FHA (MI) and Private Mortgage Insurance (PMI) now, and they all want to know how or when they can get out of their MI obligation. With FHA, you must keep your MI for 5 years no matter what. Then, after 5 years, you can get out of MI if […]Read More