Is PMI A Ggod Thing Or Not
I have been told that i can be financed 80%LTV and additional 10%with PMI. But the PMI cost is only a one time charge of $100. To me this sounds like a deal. but Ihave read on this site about people wanting to get rid of PMI. Which is the way to go.
[addsig]
PMI is not normally a one time charge. It's a recurring insurance policy that insures the leinholder (mortgage company) in the event of a default. The premiums are usually paid every month until the balance of the 1st mortgage reach 80% of the total value of the FMV.
my bank is telling me its a one time charge of $100
If it is a one time charge go for it. If you were to open a second toget rid of the PMI you'd probably spend $200. ounds like a good deal.
Look like your bank is trying to split your loan into 80% - 10% and charge you $100 for the 2nd mortage processing fee. By doing that, you did not pay any PMI.
If you have loan amount over 80%, you will pay PMI monthly on the whole loan amount until you talk to you lender when your LTV drop to 80%.
By split it 80% 10%. You are actually charge a higher interest in the 10%. So it kinds of become the insyrance for the bank.
Jya-Ning
Get clarity, if this is a line item on the GFE (Good Faith Estimate) then request clarity.
Eric & Rosa
[addsig]
Hi newinvestor44,
I have never heard of PMI being a one time charge. As the post above said, it sounds like your lender is trying to give you an 80% first mortgage and a 10% second. This is a very good method used to keep PMI off your note.
Double check what your lender is doing for you so that you are both on the same page. Best of Success!
BAMZ
Thanks for all your replies I will have to check and see exactly what the bank is talking about. Thanks again.