How do I only put 3% down

[Jean Rodriguez]

I keep hearing that I can put 3% down on a house. How can I do this and not pay the mortgage insurance?? I’m not sure if I would like to live and flip or buy and flip or house hack.... I’d like to do whichever has the least amount down.

[John Alosio]

@Jean Rodriguez

FHA loans allow you to put 3.5% down payment on an Owner occupied property. You Must live there for 1 year minimum. This is the best strategy for low money down. Unless you are a vet, then look into VA loans.

It is true that PMI/MIP (mortgage insurance) is a huge burden looking at numbers before you get started. Thinking about shoveling a wad of cash down the drain every month seems counter productive to a prospective investor. But the reality is, A lender is agreeing to hand over hundreds of thousands of dollars. and all they ask is 10-20% down payment to assure that you are worthy of their generous offer. if you are unable to cover that much cash, you're in luck! The government offers a program to assist the average American to move up in the world. Buy your own house. Its an exciting goal. But as an investor, this is the first step in the process to creating your portfolio.

if this is the only option you have to get started, jump on it. pay the dues. 
Its way easier to make those extra payments with somebody else's money(rent).

PMI sticks with your mortgage for the entire life of the loan - Until you reach 20% equity & Refinance.

For my first house, i only paid PMI for 2 years. i bought with FHA 3.5% down. House hacked, added value (repairs Renovations) over the course of 2 years, refinanced out into a traditional mortgage. my house reappraised with 30% equity. Goodby PMI. Hello Sweet equity.

Happy Hacking!