Do I need a 20% down payment

[Benny Moya]

So I know that many people say giving a 20% of down payment will help me not pay a mortgage insurance. Want to know around how much is that insures cost per month. Because here Virginia Alexandria, 30 to 40 minutes driving from the White House. where I live you only find houses of $200,000+ and getting a 20% will mean $40,000 + closing and other things we talking about $30,000 means few years of saving for me. My goal is to buy and fix them a bit maybe flip them or rent them. How can I really start if I don't have that much money for down payment. Any help will help thank you.

[Chris Mason]

Hi @Benny Moya,

PMI varies greatly by down payment size and FICO.

• Great credit, 15% down? It might come in at 0.41%.
• Bruised credit, 5% down? It might come in at 1.61%.
• FHA, 3.5% down, any credit? 0.85%.

You do [ rate * loan amount / 12 ] to find the monthly dollar amount. So [ .41% * $400k / 12 = $137/mo ], and [ 1.61% * $400k / 12 = $536.67/mo ]. That $536.67/mo is why PMI has a bad reputation. $137/mo on a $400k loan, by contrast, is trivial and shouldn't suffer the same stigma as the 5% down shoddy credit PMI, in my opinion.

PMI companies all come in with identical pricing for >90% of scenarios, no matter how hard you shop it, barring certain wholesale pricing deals that some institutions have, and lender incompetence (I've won business because someone else was overcharging for PMI due to data entry error... no one thinks to shop by PMI rate, so many do not double check their work). I have a conspiracy theory about price fixing, but I'll leave that for another day. You can get your own PMI quote here.