Old is New Again
An article in the May 4, 2007 Arizona Republic, http://www.azcentral.com/business/articles/0504biz-money0504.html, says Private Mortgage Insurance is now on the comeback.
Since the market is adjusting, and with all the bad news on teaser rates, option arms, 100% subprime, piggyback loans,ie 80/10/10, and all of the other creative programs, PMI is no longer a bad word.
PMI stands for Private Mortgage Insurance. It is the way for buyers of homes who have less than 20% down to buy a home with a conventional mortgage.
Some of us can remember when there was FHA, VA, and 80% conventional loans only. What a revolution when PMI came about. Someone with as little as 5% could buy a home! We will continue to have many more programs than we did then, but now PMI is becoming an economic option again. No resets, no teaser rates, no negative amortization, just fixed rates.
What make this very attractive now is that for loans closed in 2007 PMI is tax deductible for couples making less than $109,000. This is probably most, if not all of my clients.
In the article, David Katkov, President of PMI Mortgage Insurance Co. said buying a $100,000 with 5% down home would result in $62.50 per month in insurance costs. Beats foreclosure or short sale when your adjustable maxes out or resets doesn't it? By my arithmetic, thats about .0075%.
Jim Little, Realtor
Since the market is adjusting, and with all the bad news on teaser rates, option arms, 100% subprime, piggyback loans,ie 80/10/10, and all of the other creative programs, PMI is no longer a bad word.
PMI stands for Private Mortgage Insurance. It is the way for buyers of homes who have less than 20% down to buy a home with a conventional mortgage.
Some of us can remember when there was FHA, VA, and 80% conventional loans only. What a revolution when PMI came about. Someone with as little as 5% could buy a home! We will continue to have many more programs than we did then, but now PMI is becoming an economic option again. No resets, no teaser rates, no negative amortization, just fixed rates.
What make this very attractive now is that for loans closed in 2007 PMI is tax deductible for couples making less than $109,000. This is probably most, if not all of my clients.
In the article, David Katkov, President of PMI Mortgage Insurance Co. said buying a $100,000 with 5% down home would result in $62.50 per month in insurance costs. Beats foreclosure or short sale when your adjustable maxes out or resets doesn't it? By my arithmetic, thats about .0075%.
Jim Little, Realtor
posted by jim the jotter at 6:50 PM
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