I was reading through some blogs over the weekend and Mark Flanders Silverdale did a blog that gave definitions of PMI. What is PMI and can it be avoided. This can be such a confusing and sometimes misleading concept of why you must have mortgage insurance.
As Mark Flanders discussed, private mortgage insurance is not there to protect you, but to protect the lender in case of default. And the old rule is that you must have 20% or more down on the property to avoid this specific cost. I am only going to discuss the different types of mortgage insurance for conventional loans only. In regards to FHA and VA loans, they have their own types of mortgage insurance. And keep in mind, once you reach the 78% LTV mark, the lender has to drop the mortgage insurance. It's not the typical 80% mark that many would think, but this is if you opt to include mortgage insurance into your monthly mortgage payment. And sometimes another reason to avoid mortgage insurance would because the PMI company would underwrite the loan over again, after the lender looks at it. Depending on the difficulty of the loan, this might stop you from getting your dream home. For more details, please consult your loan officer or lender.
Here are the types of mortgage insurance: (and I will show examples of each type below)
Below is an outline of what I have discussed by using examples. In these examples, the client will be putting 10% down on a $250,000 property. Their loan amount will be $225,000. When shopping, don’t forget that you need to compare the same closing costs for each scenario. In these scenarios, let’s just assume they are with no points and no closing costs, trying to keep it simple. And that these are 30 yr fixed rates. But these examples with show how to save you money, leading you to a better savings in regards to your home.
2 loan amounts Financed PMI rate 2.10%
$200,000 & Financed Amt $ 4,725
$ 25,000 New Ln Amt $229,725
Type of PMI Monthly PMI 80/10 1st & 2nd Lender Paid PMI Financed PMI
Interest Rate 6.50% 6.50% / 8.00% 7.000% 6.50%
1st 2nd
Payments
Monthly P & I $1,422.15 $1,264.14 + $183.44 $1,496.93 $1,452.01
payment
Monthly PMI $ 144.38 0 0 0
Total monthly
Payment P & I $1,566.53 $1,447.58 $1,494.93 $1,452.01
(not incl. taxes This scenario is
& homeowners) based on if you do
the 2nd mtg as a 30 yr,
not as a 15 yr.
Even though scenario # 2 is the cheapest, it’s hard to compare because it all depends on what you can get as a 2nd mortgage rate. And the difference between this scenario and # 4 is $4.43 difference. In regards to the financed PMI, scenario # 4, you are now writing off the interest on the full loan amount and that you received a hefty savings just in the mortgage insurance itself.
***But again, each scenario is there for different reasons and each client is different. Please consult your loan officer or advisor. Like I said before, my main concern is knowing my clients goals in order to help give my advice to which is better suited for you.***
If you ever have any questions, please don't hesitate calling me for information on this.
Jeff Belonger 888-835-1663 e-mail: jbelonger@nationalfuturemortgage.com
 |
|
|
Over 17 yrs in the mortgage industry & real estate market, I bring expert knowledge and creativity to financing options & loan programs. Being honest and serving your individual needs is my desire!
Finding the right home loan can be frustrating. Finding the right company to help you get your loan can be even more confusing and tiresome. With hundreds and thousands of lenders to choose from, borrowers can easily become scared and overwhelmed. At Infinity Home Mortgage Company, I have all the programs necessary in helping you get the financing that you would need to purchase or refinance your home. IHMC has cornered the market in regards to being a leader in technology, which helps you get answers quickly. I also pride myself in customer service and making sure that I am there for you at all times.
Helping those in : New Jersey, Pennsylvania, New York, Delaware, Connecticut, Michigan, Wisconsin, Colorado, Maryland, Virginia, North Carolina, South Carolina, Florida, Nevada, California, Indiana, and Kentucky
Listen to me on this 18 minute podcast about FHA loans.
Blog Radio Talk Show -- FHA-Mortgages by the FHA Expert - Jeff Belonger
About Jeff: Like I said, I have been doing this for over 16 years. I love what I do and I am very passionate about what I do. What you will get upfront from me is honesty and being direct. I know this business so well, that I will not mislead my client and I will walk you through the whole process. It doesn't matter if you are a first time homebuyer, someone that is buying their 3rd home, or an investor that buys several homes a year. Even those that have good credit or less than perfect credit, I can help with most. And I take the time to review your goals and what you are trying to accomplish. And not just put you in a loan just to get you to closing.
Last, the referral of my service to your friends, family, and co-workers is the highest compliment I can receive
Quick application link: Mortgage Application - Apply Now
Here me discuss about FHA loans: Information about FHA loans
WHEN EXPERIENCE COUNTS..........
I can handle any type of client. It doesn't matter on the type of property or even the loan amount that you are seeking. Some loan officers and or lenders can't handle all types or only specialize in a small area. I have handled every type of client, loan amount, document type, or credit type. If a loan officer doesn't at least spend 15 to 20 minutes with you asking you the questions that should be asked, then that is where the problem usually starts. I pride myself in getting to know you and your goals. Like I said, I love to be creative and I can usually find another way of getting you that better rate or lower payment because I know all my programs. I even know a lot of programs that others aren't familiar with.
Another important item to mention is that we are one of the quicker growing mid-sized mortgage bankers on the East Coast, with offices on the West Coast also. And what makes us stand out from so many other lenders is our common sense underwriting. Not only do we have all the same programs as everyone else, but we go the extra mile when it comes to being aggressive in our decisions. We are approving loans that others have denied. It comes down to being creative at times, but within reason.
The importance here is know how to maximize the most out of your money to have that financial freedom. This is something that I can help you with, no matter if you are purchasing a new home or refinancing.
Programs that IHMC offers:
Something to point out here...You will see many lenders and or loan officers advertise that they have 100's of programs. Some will say that they deal with over 100 lenders so they can get you the best program and rate. This is just to get you to think they have the best. Like I said in a comment, when it's said and done, we all get the same rates and programs from the same places. Anyone can do a 700 credit score with 10% down. It comes down to being creative. What can I do to get your payment down based on that 10% down and that credit score. That's where I stick out above so many....or being very creative for those with less than perfect credit.
Quick application link: Mortgage Application - Apply Now
TESTIMONIALS
March 24, 2009
Jeff Belonger
Infinity Home Mortgage
Jeff,
The closing went smoothly yesterday. I just want to take a moment to express to you how grateful I am to have come across your Podcast approximately two (2) years ago; which led to us working with you when buying our first home in 2007, to now refinancing.
You have always been so generous with your time, from staying on the phone with me at 11:00 p.m. on a week night and talking me through the proper way to word a “cry letter” when trying to obtain our first mortgage to breaking down the ins and outs of interest rates when doing our current refinance.
To put it mildly, as you know my husband and I are nervous by nature so we thank you for your patience, we applaud your expertise and we appreciate you always giving us the worst case scenario because as a result both times at the closing table we were pleasantly surprised.
Thank you.
Theresa and Anthony D’Esposito
We had finally found the home we wanted and were working with a mortgage company we had discovered on our own. Unfortunately, what they had advertised was not what they delivered. We were just another “deal” and they had no concept of client service. With our settlement date fast approaching, our realtor recommended Jeff, and thank goodness he did. Jeff walked us through the process step-by-step and remained patient with us at a time when our patience had really run out. Jeff delivered on every promise and our settlement went just as planned. We are truly thankful for everything he did to make the experience a good one.
Terry L. Blair, Sr.
Deborah A. Blair
Pennsauken, NJ
As a professional real estate investor and a private home owner, Jeff has been absolutely terrific to work with. It’s funny because when I first met Jeff, he told me to talk to as many other brokers as I could. “But,” he said, “you will come back to me because I will tell you the truth the first time and let you know reality, not some pie in the sky numbers just to get your business.” He was spot on! Recently, I was working with another investor on a large deal who was persuading me to work with his broker and I kept hearing in the back of my mind, “call Jeff, he’ll tell you what you can do with this.” Instead, I followed the other investor and tried to work with his broker who supposedly “did these types of deals.” We ended up losing the deal—talking with Jeff first (I found out after it was too late) would have been the single best thing we could have done because we would have been the first, best offer. I don’t only work with Jeff on my investments (but that alone should tell you a lot), I also work with him on the personal property that I own and in which my family and I live. He has access to so many different loan programs out there that he found us the VERY BEST options available to us when we decided to refinance. I know this probably sounds too glowing, but I have never worked with someone who was willing to talk with me about what I was trying to accomplish and to help solve my problems at nearly any time of the day or night. Jeff has my business for life!
Chris Safsten Professional Real Estate Investor
Mt. Airy, Maryland Last month, 10/07, I was told by the FHA/HUD hotline that my combined loan to value (CLTV) could not be higher than 95% on a cash out refinance. Having read Jeff’s blog in the past, I recalled seeing something to the contrary. After going back through the blog, I located the reference to the HUD letter stating that as long as the borrower qualified ratio wise, then there was no CLTV requirement with subordination. Had I listen to the HUD “experts”, the loan would have died, but I went to the real “FHA expert” and got the deal closed. Keep up the great work Jeff.
Kevin Jones
Senior Mortgage Banker
GMFS Lending, Baton Rouge, La
I just wanted to thank Jeff for being extremely patient with me. He has been working with me for just about 2 years now. I first came to him while finding him on the internet. I was building a house in South Carolina. My credit wasn't in the best shape and I was going through a job change. Jeff must have pulled my credit 10 times in the last 2 years. All in all, it's finally nice to be done with it all. But I just have to thank Jeff for being there for when ever I had a question or needed him to get a hold of the builder.
Danielle Cuddahy Cambridge, Massachusetts
As a realtor my success absolutely depends upon making the process as easy as possible for my clients. So when one of my clients needs a mortgage company, I always refer them to Jeff. He is available any time of the day, night, and weekends and does everything possible to make it a win-win situation.
Kathy Reinsel
Weichert Realtor – New Jersey
Earlier this year, I decided to refinance my mortgage to take advantage of the good rates. After three months of working with a mortgage company, I finally had enough and pulled the deal. I got Jeff's name from a realtor friend of mine and we closed on the refinancing in less than a month at a lower rate. It was such a positive experience that I have referred him to other clients because of his in-depth knowledge of the industry and willingness to do anything to get the job done.
Robert Satterfield
Financial Consultant
Mt. Laurel , NJ
I applied with 4 different mortgage companies who all said that I had to wait a year before buying. My credit was slightly below average, I didn't have much money to work with, and I was self-employed. I found Jeff on a lead source advertisement. Within 2 hours after speaking to me and asking a lot of questions, he was able to assure me that he could help me. I was very skeptical because of being turned down many times. Even up until the day prior to settlement, my wife and I had our doubts. It happened just as Jeff said it would have. And I have been so appreciated beyond anything to help my family and I with our dreams.
Ted & Rosa Rodriguez -- Port Richey, Florida
I had been looking to refinance my mortgage loans for some time and I had been talking to a few lenders. I really didn't feel comfortable with any of them. Things kept changing on my good faith estimates. I received a forwarded email, and my cousin's occupation was listed at the bottom....a mortgage banker! In just a month, I had my closing..and overall it was a very pleasant experience. Jeff Belonger really cared about me and his dedicated customer service proved this. Yes, we are related as distant cousins, but I could tell that he is like this with everyone. Thanks for the great service!
Jaime K Clark
Greenfield, WI
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
