The Manufactured Housing Forums

Can anyone tell me about PMI. I read a little about it and thought it would be a good thing to stay away from. What are your opinions.

PMI is Private Mortgage Insurance.

Usually applied whenever you have less than 20% of your own funds in a property you want to buy. Pretty much every bank and mortgage company charges it. If you have less than 20% to put down, try your local credit unions.. They don't have to charge PMI, and many don't.

PMI covers the lender losses if you fail to pay the payments..You can avoid PMI with 20% or more down...It will go away aftter your equity is up to 20%..usually in 8 or 9 years...If you are in a higth apprexciation area..often you can pay for an apprasisal a few years from nopw and prove your equity..then the bank will relieve you of the burden...

Another possibility is 80/20 loans, but they don't seem to apply to construction to perm loans.

Note about release of PMI! At least with my lender (Wells Fargo), PMI will not go away until 1) I request it, when I have paid 20% of the principal, or 2) automatically (Federal law) when I have paid 22%. I CANNOT get an appraisal, submit that, and have PMI removed. I would have to use the appraisal to refinance with (now) 20% down.

Just wanted to make that clear.
PMI is not deductable, as mortgage interest is. Some banks will set up a "silent second" mortgage to cover the other 20% of the value. The rate is higher than the main mortgage rate, but it MAY be less overall, since you can deduct it.