Click Here

REALTORŪ Magazine Online: The real estate professional's business support tool.


Daily Real Estate News  |   February 21, 2006  |   Alternatives to Paying PMI If you have a buyer who doesn’t have enough money for a 20 percent down payment, the buyer can still avoid paying private mortgage insurance (PMI) through financing alternatives. Paying PMI, which compensates the lender if the home owner defaults, adds an extra $10 to $200 to a monthly bill depending on the size of the loan. Here are three strategies for avoiding PMI.
  • Piggyback loans. The borrower comes up with part of the down payment — usually 10 percent — and either the lender or the seller comes up with the rest, usually at a fairly high rate of interest.
  • Lender insurance. Some lenders don’t charge PMI. Instead, they bump up the interest rate and self insure.
  • Reappraisals. When home values are rising quickly, sometimes it is easier to take the PMI and plan to get the house reappraised as quickly as possible. After a minimum of two years, many lenders will drop PMI as long as borrowers can prove they now have 20 percent equity.
Source: MarketWatch, Marshall Loeb (02/21/06)

Browse all of today's news
E-mail this page to a friend
Give us feedback

Search news
Launch my search
Subscribe to news
Subscribe to News
Daily and weekly real estate news, trends, NAR press releases, convention coverage, plus exclusive features and columns.

RSS Feed
Get the Daily Real Estate News delivered straight to your desktop or news aggregator. (New to RSS? Learn the basics here.)
How did you sell it?
Tell us how you overcame hurdles to sell a challenging or very unique listing!