“Hi Gary. We make good income, but we don’t have a lot of money to put down on a home. I’ve heard if you don’t put at least 20% down you have to pay mortgage insurance. Is there any way around that?”
Answer:
Not really.
Mortgage insurance is required for almost all home loans with a “loan-to-value” ratio of over 80%. In other words, if you put down less than 20%, you’ll need to pay mortgage insurance.
Note that this insurance protects the lender (NOT you) should you lose your home to foreclosure.
There are a couple of loans (such as Fannie Mae “Homepath” loans on their foreclosures) that allow under 20% w/o mortgage insurance, but they have extra costs that cost about as much as mortgage insurance.
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