Posted on: 03rd May, 2007 05:27 am
A few months ago, private mortgage insurance was not much preferred by home buyers as a considerable number of such buyers went for adjustable rate mortgages or piggyback loans or as people say the exotic loan products. But lenders have now tightened rules and as such first time buyers who can put down very little are going for fixed rate loans with private mortgage insurance policies.
[color=Red:321e936407][size=9:321e936407]Source: mercurynews[/size:321e936407][/color:321e936407]
I wonder why is it so? Is it true that fixed rate loans are becoming more popular than adjustable ones?
[color=Red:321e936407][size=9:321e936407]Source: mercurynews[/size:321e936407][/color:321e936407]
I wonder why is it so? Is it true that fixed rate loans are becoming more popular than adjustable ones?
"But lenders have now tightened rules"
This is the result of the subprime crisis we have seen some time back and now it is becoming harder for people to qualify for such type of exotic loans. So for such borrowers a frm with pmi seems to be more safer now.
This is the result of the subprime crisis we have seen some time back and now it is becoming harder for people to qualify for such type of exotic loans. So for such borrowers a frm with pmi seems to be more safer now.
For me one more reason that borrowers are taking loans with pmi is that pmi premiums are going to be tax deductible for mortgages that close this year. For tax sensitive borrowers this is one important point that they take into consideration. Previous years many who did not have the money for a 20% down had selected piggyback mortgages but now many similar borrowers are opting for a mortgage with pmi because of tax deductibility of the premiums this year.
Brady
Brady
yes, but the exception is only for the 2007 tax year unless congress extends it. A one year savings is tenuous at best.
I still think that more first-time buyers are getting educated to the FHA program and other low to moderate income housing programs in the marketplace which provide for 95% financing or more with reduced or no private mortgage insurance costs.
I still think that more first-time buyers are getting educated to the FHA program and other low to moderate income housing programs in the marketplace which provide for 95% financing or more with reduced or no private mortgage insurance costs.
Yes, PMI is deductible for this year itself and if it extends, that'll be good news for all first time buyers.
Ken, I agree with you when you say that first time buyers are getting educated to FHA loan programs. In my opinion, lenders are now encouraging buyers to get educated on such loan programs. Until and unless people are educated, how are they going to realize how a loan program is going to help them.
Ken, I agree with you when you say that first time buyers are getting educated to FHA loan programs. In my opinion, lenders are now encouraging buyers to get educated on such loan programs. Until and unless people are educated, how are they going to realize how a loan program is going to help them.