Avoiding PMI?

Chuck Finley

Poster to the Stars
Jul 27, 2013
35
25
18
Around the Triangle
#1
My brother wants a new house. He gas 10% down, but he'll have more than 20% down when he sells his current home.
And he can cover two mortgages.
How can he buy first and roll his equity when he sells so he can avoid paying PMI?
 

Melissa S

Knows the Ropes
Jun 19, 2014
3
1
3
#2
Chuck - it depends. 1st he can take an equity line off of his current home and use that for the down payment on his new home, however, there will be a prepayment penalty if you close the equity line early. He could just apply for borrower paid mi on his mortgage and after he sells his current home apply the money to his new loan, have it re-casted and have MI removed.
 

adele

Knows the Ropes
Jun 9, 2012
48
18
8
Raleigh
#3
Chuck - it depends. 1st he can take an equity line off of his current home and use that for the down payment on his new home, however, there will be a prepayment penalty if you close the equity line early. He could just apply for borrower paid mi on his mortgage and after he sells his current home apply the money to his new loan, have it re-casted and have MI removed.
That's what my sister and her husband did. They paid just a little extra. That will be fine, because they will save thousands over time.