Question by bgfuzz: My mortgage will be 80% of the home value, pills dosage can I avoid paying PMI since I am financing only 80% .?
Unofficially the value on the internet is +150K, the seller needs to sell as is and there is considerable upgrades needed with heat/ac,water heater,floors (refinish hardwood), paint all interior,bathroom water damage. They are asking 120K and I am doing 100% financing with great credit, trying to avoid PMI mortgage insurance.
Best answer:
Answer by Rafael P
The value is the selling price or appraised value, whichever is lower. So, if the selling price is 120k, and you are financing 120k, it is a 100% loan. In about 6 months you can challenge value, and if the appraisal (at your expense)comes in at 150k, then you can request the PMI removal.
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If the selling price is $ 120k you’ll need to put down at least $ 24k to avoid PMI. The 80% figure is based upon the lower of the appraised value or the selling price.
Don’t put ANY stock in internet-based valuations. They’re largely useless.
You are going to have to pay pmi unless you are putting 20% down of your own money. You can drop the PMI if the equity is there in a year or two. Many lenders want 2 years and they are still going to fight you on it more then likely.
You can always refinance but that is somewhat expensive for the potential savings.
If your credit scores are over 700 you may qualify for a No PMI program which should lower your payment.
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.