Mortgage Loans

[MovingForward_2012]

Okay well if you go conventional, you will most likely get a better interest rate than going FHA. So I would do that. If you can comfortably put down 22% to avoid the PMI on a $379K house, I would do that as well.

Tooleman mentioned another option through conventional regarding the ability to pay up front PMI and be done with it. I don't know what the downpayment requirements are for this.

[MovingForward_2012]

Never mind. I just saw tooleman said it requires 5% down. But what is LPMI?

[tooleman694]

LPMI is lender paid mortgage insurance.

You can either pay an upfront fee or no fee but you take a hit on your interest rate.

This is one of the cool things about doing a conventional mortgage, you just pay the fee upfront and its done.

I think the fee is somewhere around 2 percent of the loan. So a 350k mortgage it would be a 7000 upfront fee. It is a good deal.

[MovingForward_2012]

Interesting. So the LPMI is paid by the lender on your behalf until 78% LTV if you just pay the upfront fee and put 5% down?

[tooleman694]

You could do 3 percent down as well. Yes the lender pays the MI for you.

[rubu]

Thats great information...I should for sure do...10% down and buy PMI directly. I will find out the information....

[rubu]

http://budgeting.thenest.com/explanation-lender-paid-mortgage-insurance-3602.html

Is this what you talking about?

[tooleman694]

Kind of, you can take a higher rate if you want. But I think the better way is to pay the fee and keep the rate low.

[rubu]

So essentially I am paying a fee and more on interest because the borrowed amount becomes bigger?

Thanks.

[tooleman694]

A fee or higher rate.

You pick which way you want to go.