Rental Property Investor · Washington, DC · Member since 2014 · 94 posts · 12 votes
I am looking to owner occupy a multifamily in the DC area, but Ideally I don't want to put 20% down (property will be in the 500-700 range so that's a lot of cash) and I don't want to have PMI messing up my profitability... I know I know I'm asking for my cake and to eat it too!
Reason I am throwing this out there is that I have heard through the grapevine of 5% down options with either lender paid or lender financed mortgage insurance. I know the i% rate may be a little higher and you may have to put some points towards it to get it down, but still probably a better option than FHA if I can find it.
Washington, DC · Member since 2012 · 57 posts · 34 votes
11y
Hi Brandt,
In the DC area there are a few lenders that will offer the 5% down option. BB&T has a 5% down fixed rate mortgage that will go up to a maximum of $650k (or maybe $625k, I forget). I was actually just dealing with them last week and this specific product. Their interest rates are sitting at about 3.8% for that product. It does have PMI but not nearly at the cost of FHA and you are getting 30 years of 3.8% interest. So it might be worth it to consider. All depends on your long term goals and plans. The idea of PMI offends me as well but this is a good option for 5% down. There are a couple of other credit unions in the area that offer the 5% down but the ones I have talked to will only lend up to a maximum of $417k with those specific loan products.
I would encourage you to talk to BB&T as well as any of the local credit unions. We have quite a few in the DC metro area. Shop around for the best loan product that will fit your goals.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
No, you'll have PMI or MIP above 80% LTV, MIP is prepaid and non-refundable, you can get PMI removed once you hit a lower LTV.
Uninsured loans are not available due to regulatory lending risks, you might use additional collateral on portfolio loans or commercial loans. In any institutional loan, there will be either mortgage insurance or bonding requirements in some manner, a bank may insure a loan or portfolio but you'll pay the price in the interest rate or by a premium. :)
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
11y
If you're looking at conventional, non-insured loans, stay with small local banks or at least more regional banks. Particularly, stay away from the big guys. Unless, as mentioned above regarding BB&T, there are banks offering special programs, your best bet is to build relationships with bankers in advance.
Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
11y
Brant,
On an SFR you can get LPMI ( lender paid mortgage insurance ) so you're still paying mi but it will be built into the interest rate. So yes your rate will be a little higher but it for sure is less than FHA.
To expand on what Hattie is saying you want to stay away from banks that have OVERLAYS. This is a bank that adds their own guidelines to whatever program you're looking for. Banks that don't have OVERLAYS big or small will UW to what DU and or LP give them.