PMI

[LaDonna]

I know that with a V.A. loan you do not have to have PMI (private mortgage insurance) but our broker is trying to make us get it.... did any of you avoid the PMI and if so how???

[princessbunny197]

there is no monthly MI (i dont think, i just woke up and i'm sick lol) but you have a VA funding fee that you have to pay at closing, which is separate from any other fees that you will be charged. It's a 2% fee. I haven't done a VA loan in a while but I can get some more info on it tomorrow for you.

[gunsgirl]

you do not have to get it with VA- and we did not get it- either time we did VA backed loans.

you can also have the funding fee rolled into the mortgage to lower at thr tabel closing costs.

[Rich Lunsford]

Private mortgage insurance (PMI) is insurance you pay for that is payable to your mortgage company IF you are not able to pay back the loan and the mortgage company is not able to sell your home for the amount of the mortgage. In other words, PMI is insurance to protect the mortgage company if you stop making your mortgage payment.

However, if you are using the VA for your home loan, then the VA has already guaranteed that the lender will be paid back if you default. So PMI should not be required for your VA loan. According to Bob Finneran, the VA’s assistant director for loan policy and valuation not only does the VA not require PMI, it also prohibits lenders from requiring it - from and article by Dana Dratch at http://www.bankrate.com/brm/news/rea...4/va-loans.asp. (source: “Should you try a VA home loan,” by Dana Dratch)

Head back to your mortgage company and request that they not include PMI. And enjoy that new home!

Rich Lunsford is a CERTIFIED FINANCIAL PLANNERTM practitioner with USAA Financial Planning Services, one of the USAA family of companies. Rich holds the Series 7 and 66 securities licenses. Rich also holds the designations of Chartered Financial Consultant (ChFC®), Chartered Life Underwriter (CLU®), and CHARTERED RETIREMENT PLANNING COUNSELOR (CRPC®).

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.