Saturday, March 8, 2014

Should I Get FHA or Private Mortgage Insurance?

If you pay less than 20% down on your mortgage, you will need either FHA or PMI

It is possible to get a mortgage in Los Angeles in 2014 without 20% down.  It isn't easy, and you will need a decent credit score.  However, if you have less than 20% down, you will absolutely be required to have mortgage insurance. 

There are two types.  The FHA was established for the purpose of hoping those who might not otherwise be able to afford to buy their own home with a vehicle that would guarantee the mortgage to the underwriting bank or other lender.  These federally insured loans have helped millions of folks get into a home, duplex or small apartment building 

FHA allows you to have as little as 3.5% down, but not all lenders will allow you to go with such a small down payment, even with FHA.  Your credit score will also impact the amount that you can put down.  While the FHA still provides the bulk of mortgage insurance, the cost has gone up substantially (almost double since 2008), and this has resulted in less expensive private insurance plans to make a resurgence.

PMI or private mortgage insurance generally starts at 5% down.  Currently the overall cost and the terms of PMI are much better than FHA.  FHA insurance may be easier to get for some borrowers.  According to

If you are in the market for a home or small multi residential unit, Bill Rayman can help you determine the best options available for you.  There is no cost or obligation for picking Bill's brain regarding your specific needs.  Bill will fight for you.  His only goal is to get you the best possible deal given your hopes and circumstances.   Call  424-354-5325

Bill Rayman Home Mortgage
12121 Wilshire Blvd
Suite 350
LA CA 90025


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