3 Ways to Avoid PMI
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What are some ways to avoid PMI?
- Buy In Your Means – The easiest way to avoid taking on PMI is to buy a house within your means. I know this is a pretty blunt way to say it, but today with interest rates so low, many people are buying homes way outside of their true means. By sticking to homes and loans that fit with a realistic budget, you will be better able to come up with a sufficient down payment or to pay it off quickly.
- Borrow Your Down Payment – If you have resources to tap for down payment assistance, use them. Avoiding PMI is easy if you just have your 20% down payment. Check with family, friends, and financial centers for down payment assistance. You can offer repayment with interest, and a good rate at that, and still never pay nearly what you would have to for PMI.
- Take Two Loans – Remember, PMI is only mandated when any ONE loan exceeds 80% of the loan to value of the property. This does not mean that you can't have two loans for 80% and 20% total. In fact, taking a first and a second is the best way to avoid PMI without needing to go beyond large lending institutions for the funds. Any of these three suggestions can help you avoid taking on PMI. Consult with a professional mortgage broker or lender for more information on how to avoid PMI altogether.
4/10/2009 3:13:58 PM
I purchased a condo for 135,000 putting $30,000 down to avoid PMI in 12/2006 fiancing 105,000.
To date my mortgage balance is $98,000. I live on a fixed income and wish to get a remodification home loan but mortgagors want to charge me PMI. I am not buying a new home. Therefore how can I avoid paying this.