Banks telling me I have to pay Pmi with a large down payment because of prior bankruptcy.

[thumbelinas]

Had a prior bankruptcy 2 years ago. I have a large down payment of 40,000 and it works out to a 32 % down payment on the house. The bank wants Pmi. Does this sound right with the bankruptcy I should have to pay? Credit score 667.

[road2freedom]

Was there a foreclosure? What loan program are they using?

[Brian B The Loan Professor]

The only program that allows for a mortgage post BK 2 years is FHA so yes PMI is required on all FHA loans.

Sorry but you are kind of stuck - you dont have to put that much down if you choose not to

[doodlebugger]

To clarify though the PMI is not because of the OP's bankruptcy - it's because it's an FHA loan - right?

[road2freedom]

If FHA, and you need to buy now, I would consider setting aside enough cash to pay for at least 2 years of monthly PMI and put the rest down or at least the amount that would garner the lowest PMI. For 30 years I believe that's 5% and will have monthly PMI of 130 bps. If you can swing 15 years, I believe it's 22% and the PMI drops to 45 bps. Then, in 2 years revisit it and see if you can refi to a conventional loan. It stinks that this is the only option with that large a downpayment, but I guess that's the price for getting back on the horse so soon. Good luck!

[DallasLoanGuy]

To clarify though the PMI is not because of the OP's bankruptcy - it's because it's an FHA loan - right?

 

pretty sure.

NEVER heard of pmi required with 20% down.

 

more likely that loan officer had to put the borrower into an fha loan..... which always has pmi regardless of down payment