Need short term loan to avoid PMI

[Rick Grimsley]

Hello all, we are buying a property and selling our existing home. We have 150k equity in the house we are selling. We are already in contract to buy the new home. We will likely close on the new home before we sell the existing one because we are just getting it on the market. I have enough cash to put down up to 15% on the new home and close the loan before my existing property sells (about 75k) but would need another 25k down to avoid pmi on the new property. I've got 800 fico score, long work history, no credit problems. The new loan will be about 480k total. Don't really want to finance the PMI because I will still be stuck with the bill on it. What ideas do you have?

[Chris Mason]

Originally posted by @Rick Grimsley:

Hello all, we are buying a property and selling our existing home. We have 150k equity in the house we are selling. We are already in contract to buy the new home. We will likely close on the new home before we sell the existing one because we are just getting it on the market. I have enough cash to put down up to 15% on the new home and close the loan before my existing property sells (about 75k) but would need another 25k down to avoid pmi on the new property. I've got 800 fico score, long work history, no credit problems. The new loan will be about 480k total. Don't really want to finance the PMI because I will still be stuck with the bill on it. What ideas do you have?

You can take out an 80% LTV 1st paired with a 5% or 10% 2nd mortgage. On top of that, if you will be able to go significantly below 80% LTV after your home sells, some lenders offer "recasting," which is where you make a large balance paydown after closing, and your minimum P&I payment is recalculated to reflect the newly lowered balance. Your existing lender might offer, and if not then switch to a lender that does.