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Diana Said:

Do I have to have Mortgage Insurance?

We Answered:

There are several different types of mortage insurance. If you are referring to PMI you need 20% down to escape that. If you are talking insurance that will pay off your mortage if you or any other signer would die, that type is optional. It is only a good deal if someone dies, how much is peace of mind worth?pp

Alex Said:

My mortgage will be 80% of the home value, can I avoid paying PMI since I am financing only 80% .?

We Answered:

get a FHA 203K mortgage.....they will lend you extra money for the repairs on the home....and they have great rates for 30yr fixed....with 2.25% down payment.

the PMI for FHA is called MIP..and it's a low monthly payment

it's called the FHA Rehab mortgage.

Heather Said:

Options for avoiding Private Mortgage Insurance (PMI)?

We Answered:

Nope.

PMI protects the mortgage companies interest should the home go into foreclosure. There is no substitute for it.

The way to avoid it is to have 20% down.

Some mortgage companies used to let you get a loan with out PMI-- but at a much higher interest rate. When I bought my house, I could get a loan w/o PMI at 3/4 more. I figured PMI will drop off eventually. The only way to get rid of a higher interest rate is to refinance and incur the 5000 worth of expenses that goes with it. So, I took the lower interest rate and the PMI. I'll send extra to my mortgage each month to try an drop it earlier.

Some mortgage companies will do an 80/20. You get a first mortgage for 80% and a second mortgage for 20%. The second mortgage has a higher interest rate.

As far as no down payment goes....since the mortgage crisis, very few mortgage companies will to a 100% loan. You are going to have to have some type of down payment -- even 3-5%.