Is PMI always required on low-down $255 Payday Loans Online home loans?


A growing number of private lenders are loosening up their requirements for low-down-payment loans. But private mortgage insurance, or PMI, usually is required on loans with less than a 20 percent downpayment. The Homeowners Protection Act states PMI must be dropped on any loan originated after July 29, 1999 IF it has a 78 percent loan-to-value ratio.


How can Fannie Mae help a home buyer?


Fannie Mae’s Community Home Buyers Program allows first-time buyers with little cash to obtain 95 percent financing. Participants may put down as little as 3 percent of their own money, with the remainder permitted in the form of a gift from family members, a government program or nonprofit agency. Mortgage insurance is required on all loans above 80 percent loan-to-value ratio when borrowers do not use their own funds for at least 5 percent down.


The program is administered through participating lenders. There are income limits in different states. However, the income restriction is waived when borrowers participate in the Fannie Neighbors program. Fannie Neighbors also has lower income requirements for borrowers who want to buy in designated central cities.


People who are borrowing in either of these $255 Payday Loans Online programs must attend a seminar on home ownership and the home buying process.


Should I put more or less down, if we can afford it?


Putting down as little as possible allows buyers to take full advantage of the tax benefits of home ownership, many experts say. Mortgage interest and property taxes are fully deductible from state and federal income taxes. Buyers using a small down payment also have a reserve for making unexpected improvements.


Other real estate experts, however, advise that it is more prudent to make a larger down payment and thereby reduce the amount of debt that must be financed.


What is a low down payment?


A low down payment is anything less than the standard 20 percent. Many people borrow with less than 20 percent down by obtaining private mortgage insurance, or PMI. There also are numerous programs to help first-time buyers with little or no down payment, including FHA, VA and Fannie Mae’s Community Home Buyers Program.


Who do I call for a low-down-payment loan?


Here are several popular programs available to home buyers, along with the appropriate telephone numbers for more information:

*The Federal Housing Administration has programs which require as little as 3 or 4 percent cash down. FHA loans are originated and serviced by private lenders. Check with local lenders to find the best source for your loan.

* Veterans (and reservists) who qualify can buy a home with no money down through the U.S. Department of Veterans Affairs. Call 1-800-827-1000 to find out more.

* Both the VA and FHA offer foreclosure properties for sale, some requiring as little as $100 down. Anyone interested in a VA foreclosure can call 1-800-827-1000 to request a current listing. For FHA-insured properties, call your local U.S. Housing and Urban Development office for more information.

Fannie Mae helps buyers who can put down as little as 3 percent of their own money. To see if this can work for you, call 1-800-732-6643.

* Many cities and counties offer special housing loans in order to promote the benefits of home ownership in their communities. To find out what funds may be available to you, inquire at your local housing department.


How do some of these low-down programs work?


Most of the private and government low-down loan programs have special requirements. These rules range from requiring borrowers to be first-time home buyers to limits on family income.


In general, cities and counties require that borrowers earn no more than 100 percent to 120 percent of the county’s average household income. However, some programs such as the Federal Housing Administration have no income restrictions and do not require the borrower to be a first-time buyer.


Many private low-down loan programs insist borrowers have good credit and also that they obtain private mortgage insurance, which is a small monthly insurance payment that insures the lender against default. Some of the city and county programs are available only in targeted neighborhoods where local leaders are trying to spark reinvestment or increase the homeownership rate.



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