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MORTGAGE TIPS: 5 Strategies On How To Avoid PMI Without 20% Down - YouTube
Channel: Bronx Homes
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if you're thinking about buying a house
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with less than 20 down
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then this is the video for you
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welcome home my name is justin your
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local bronx real estate agent
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and if you're a first time viewer and
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you want to get weekly tips on the home
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selling process
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or home buying advice be sure to slam
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that subscribe button and the bell next
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to it so you don't miss anything
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with that being said today we are
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talking about pmi
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specifically what is it when is it
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required what does it cover
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what does it cost and five different
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ways you can avoid it when buying your
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home
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stay tuned to the end because the fifth
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way i think you're really gonna like
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conventional loan pmi what are you
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talking about pmi stands for
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private mortgage insurance okay now
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we're here insurance we're thinking oh
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what does it cover
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so what does private mortgage insurance
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cover well
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not you for me it's for the bank
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in case we can't pay back the cost of
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pmi is going to vary
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a lot will depend on your credit score
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and your down payment
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however you seem to like the half
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percent percent and a half range
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oftentimes
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so a lot of people are like hey is there
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a way for me to put down
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less than 20 when it's typically
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required that i have to pay pmi
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and still not have to pay pmi
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that's why we're here today before we
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get into these five different ways to
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get out of pmi without putting out 20
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you might have questions about the fha
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loans and their mortgage insurance
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premiums mit
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similar concept pretty much but the way
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it operates is a little bit different
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than emi
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and there's some different stipulations
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around it so if you have
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questions or interested in the video on
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that drop it in the comments below
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i'd be happy to cover it first way we
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can avoid private mortgage insurance
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with less than 20 percent down
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is lender paid mortgage insurance
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it is what it's called so the lender's
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gonna pay your mortgage insurance on
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your behalf
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however this usually a trade-off so
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typically they charge you a higher
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interest rate
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you definitely want to check the numbers
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to see what makes most sense for you
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number two the piggy back loan
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piggy piggyback i know second mortgage
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that's what we're talking about
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so you know how typically you have one
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mortgage and your down payment
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and that covers your purchase well in
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this instance it's going to be
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the first mortgage let's say 80 that
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you're borrowing
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a second moment for ten percent that
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you're also borrowing
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and then the ten percent down payment
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that you're providing
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now between your down payment and your
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second mortgage
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you have twenty percent down so in that
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case you've avoided
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mortgage insurance however trade-offs
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so with the second mortgage now you're
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looking at two
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sets of closing costs because you are
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closing on two different loans
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and also a higher interest rate most
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likely on that second mortgage that
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you're going to have
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so definitely just like we want to run
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the numbers when it's underpaid mortgage
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insurance we want to run run around the
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numbers
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if we're talking about doing a second
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mortgage versus paying for mortgage
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insurance
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want to see what works best for you
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third option
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low down payment programs with no pmi so
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a lot of banks are offering these
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a lot of times on a rotating basis
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saying that they have these mortgages
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available that you can put down less
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than 20
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and still not pay any mortgage insurance
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how accurate that is
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i don't know i'm sure there's no more
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insurance but
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what is the trade-off that they're
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getting in return
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for providing this benefit i think it's
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something probably a higher interest
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rate and this might just be a matter of
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branding
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but if you do see a bank that's offering
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it when you find a program
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check it out see if it makes sense for
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you fourth option
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va loans so if you're a veteran and you
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qualify for the va
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loan great you have no pmi to worry
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about they don't charge it
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right plus your zero percent down
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payment your cap closing costs i mean
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there's a lot of good things about va
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loans so if you qualify to use one
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and you want to use one you know for
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residents that you're getting this is a
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great time especially if you're putting
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down less than 20
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because then you don't have to worry
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about that extra monthly charge
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that benefits the bank and not you
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fifth way to avoid pmi with less than
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twenty percent down
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my personal favorite down payment
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assistance programs
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so there's a ton of programs out there
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they can give you money in the form of
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grants they can give you money to form
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forgivable loans which
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particularly functions like a grant as
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well you follow guidelines
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so there's different ways it can be done
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but this money can help you get over
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that 20 percent threshold
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so you don't have to worry about broken
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insurance in the long run
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that's going to save you money if you
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want to learn more about the different
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down payment options and resources
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available to you
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programs that you can use right now
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there's another video up top that you
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can check out
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of course if you know anyone that would
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benefit from this video please be sure
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to share it with them
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last make sure to slam that subscribe
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button so you can keep getting the real
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on real estate
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thanks again and i'll see you next time
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