Low Down Payment Loans Without PMI
Multiple Options Available.
No PMI Loan Solutions
Introducing the 1% Down, No PMI program from Hurst Lending & Insurance. Say goodbye to PMI payments! With our innovative solution, you can secure a no PMI loan with just 1% down.
Low Down Payment
Competitive Interest Rates
Overall Cost Savings
Details About Private Mortgage Insurance (PMI)?
What is PMI?
Private Mortgage Insurance (PMI) is a type of insurance that lenders require borrowers to purchase when they have a conventional mortgage loan with a down payment that is less than 20% of the home’s value. PMI protects the lender in case the borrower defaults on the loan.
When a borrower pays for PMI, they are essentially paying for an insurance policy that safeguards the lender’s investment in the property. If the borrower is unable to make their mortgage payments and the property goes into foreclosure, PMI reimburses the lender for a portion of the outstanding loan balance.
PMI payments are typically added to the borrower’s monthly mortgage payment, increasing their overall housing costs. These payments continue until the borrower has built up enough equity in the home to reach a loan-to-value ratio of 80%, meaning the loan amount is 80% or less of the home’s value. At that point, the borrower can request the cancellation of PMI.
It’s important to note that PMI only applies to conventional loans, not government-backed loans like FHA loans or VA loans, which have their own insurance requirements.
PMI Duration
The duration of PMI payments can vary depending on several factors, including the terms of your loan and the loan-to-value ratio (LTV) at the time of purchase. In general, there are three common scenarios for PMI payment duration:
Automatic Termination: If you have a conventional mortgage, the Homeowners Protection Act (HPA) requires the automatic termination of PMI when your loan reaches 78% of the original purchase price or appraised value, whichever is less. This means that once your loan balance falls below 78% of the initial value, your PMI payments should automatically cease.
Requested Cancellation: You have the option to request the cancellation of PMI when your loan reaches a loan-to-value ratio of 80%. This means your remaining loan balance is 80% or less of the home’s current appraised value. It is essential to contact your lender to initiate the PMI cancellation process formally.
Final Termination: Even if you haven’t reached the 78% threshold or requested cancellation, PMI will eventually terminate once you have reached the midpoint of the loan’s amortization schedule. This is typically around the halfway point of your loan’s original term. For example, if you have a 30-year mortgage, PMI would be terminated after 15 years.
I’ve worked with Jay Hurst on several loans. Jay is extremely knowledgeable and helpful, and was able to advise me on the options for my recent purchase. Great guy to have on your side, and great rates!
Hurst Lending was very easy to work with and stayed in constant contact with me throughout the loan process so I never had to wonder what the status of the loan was.
The Hurst Lending Difference
Funding Choices
Low downpayment options available.
Quick Decisions
With a quick closing and no red tape.
Great Rates
We offer some of the best rates available.
Problem Solving
Creative approaches for unique situations
Ways to Avoid PMI
While there are various methods to obtain a no PMI loan, the most convenient option is to acquire one through Hurst Lending. However, below are alternative approaches to consider.
New 1% Down Conventional Loan
Put Down 20%
Get a 2nd Lien
Pay an Upfront Fee (Borrower Paid PMI)
Lender Paid PMI
Veterans Only Loan
Buy a Home in a Rural Area
Frequently Asked Questions
What is PMI?
How much does PMI cost?
How do I pay PMI?
PMI payments are typically included in your total monthly mortgage payment, which consists of principal, interest, property taxes, and homeowners insurance (often abbreviated as PITI). The lender will collect the PMI premium and remit it to the PMI provider on your behalf.
How does PMI benefit lenders?
When can I cancel my Private Mortgage Insurance (PMI)?
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Automatic Termination: According to the Homeowners Protection Act (HPA), your lender must automatically terminate PMI when your loan balance reaches 78% of the original purchase price or appraised value (whichever is less). This occurs based on the loan’s amortization schedule, without any action required from you.
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Requested Cancellation: You have the option to request the cancellation of PMI once your loan balance reaches 80% of the original purchase price or appraised value (whichever is less). You must contact your lender and submit a written request for PMI cancellation. Your lender may have additional requirements, such as a good payment history and an appraisal to confirm the property’s value.
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Final Termination: Even if you haven’t reached the 78% or 80% thresholds, PMI will eventually terminate once you reach the midpoint of the loan’s amortization schedule. This means approximately halfway through the term of your loan. For instance, if you have a 30-year mortgage, PMI would be terminated after 15 years.
Will my lender cancel my mortgage insurance when my house rises in value?
No, your lender will not automatically cancel your mortgage insurance (PMI) based solely on an increase in your home’s value. The cancellation of PMI is primarily dependent on your loan balance reaching a specific threshold relative to the original purchase price or appraised value, as specified by the Homeowners Protection Act (HPA).
However, if you believe that your home’s value has significantly increased and you now have a loan-to-value ratio of 80% or less, you can contact your lender and request a PMI cancellation based on a new appraisal. Your lender may require you to provide evidence of the increased value through an appraisal conducted by a qualified professional.
Is paying PMI ever a good idea?
In general, paying for PMI is not recommended; however, there are situations where it can make sense. For example, if homes in your area are appreciating rapidly, obtaining a loan with mortgage insurance can be advantageous. Under federal law, lenders must remove mortgage insurance once you have 20% equity in your home, so if your property’s value increases, you can request a new appraisal to demonstrate sufficient equity and have the insurance removed. Additionally, if you plan to stay in your home for a very short period, typically less than a year, it may be more cost-effective to pay for mortgage insurance instead of obtaining a second loan with associated closing costs. Ultimately, we at Hurst Lending can evaluate your specific circumstances to help you make an informed decision.
Can I still qualify for the No PMI loan program if I have a low down payment.
How can I determine if the No PMI loan program is right for me?
What is the no PMI loan program from Hurst Lending?
The No PMI loan program from Hurst Lending is a mortgage option that allows borrowers to secure a loan without the need for Private Mortgage Insurance, even with a down payment less than 20%.
What are the benefits of the no PMI program?
The No PMI loan program offers borrowers the advantage of avoiding costly PMI payments, providing more flexibility in down payment options, and the opportunity to access competitive interest rates.
Are the interest rates competitive with the No PMI loan program?
Can I refinance my existing mortgage into the No PMI loan program?
Borrower vs. Lender Paid PMI
What are the differences beetween these two programs?
What is Borrower Paid PMI?
Borrower-Paid PMI is an option for homebuyers who cannot afford a 20% down payment and want to avoid monthly PMI payments. With this approach, borrowers pay an upfront fee instead of the ongoing monthly premium. However, we recommend considering borrower-paid PMI only when housing values are not expected to appreciate significantly or when the market is experiencing a decline. This option allows borrowers to remove PMI from their loan upfront, providing an alternative to monthly payments. To explore the best PMI options for your specific situation or to explore other alternatives to avoid PMI, we recommend contacting our mortgage experts.
What is Borrower Paid PMI?
Lender-Paid PMI is an option where the lender pays for the private mortgage insurance (PMI) on behalf of the borrower in exchange for a higher interest rate on the loan. While this may seem advantageous to the lender, we generally do not recommend this option to our customers. The reason is that with a standard PMI loan, the lender is obligated to remove the PMI once the borrower reaches 20% equity in the home, whether through paying down the loan balance or due to appreciation in home value. In contrast, with lender-paid PMI, the borrower is locked into a higher interest rate for the entire loan term.
A Better Solution
At Hurst Lending, we offer alternative options that are more favorable for avoiding PMI, such as our 1% down no PMI and 5% down no PMI loan programs. These programs provide low down-payment options without the need for PMI. We aim to provide diverse programs that cater to the needs of our homebuyers, ensuring that anyone capable of owning their dream home can do so. To explore the best options for your specific situation and receive a customized quote or answers to your questions, we encourage you to reach out to our mortgage advisors.
About Hurst Lending
We have been helping our customers buy, sell, and refinance their homes since 2006. Our personalized approach to the home buying process includes a suite of services that solve common hurdles in the home buying process. Have you ever experienced the frustration of trying to buy before you sell; Losing your dream home in a bidding war; Trying to get a No-Seasoning Cash-out loan; Being unable to obtain a mortgage because your new or old house needs modest repairs; or simply because you prefer using our funds to close quickly without having to liquidate other investments? Our Industry-leading suite of short-term loans solves these issues. We also offer a suite of real estate investor loan products and a full suite of conventional, VA, FHA, construction and traditional home loans.