Re: About to buy a house
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So this just boils down to going to another lender and talking them into loaning you 20%?
Seems like they'd be hesitant to do this, knowing what you're getting it for (simply to forego the PMI).
Basically, you're trying to get a cash loan from another bank?
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No. You work it out all with the same lender/agent. The reason you need PMI if you're under 20% equity is because they're risking quite a bit giving you this money, so you have to buy insurance against you defaulting. In lieu of that, they'll loan you the 20% at a higher interest rate (to account for their higher risk - that there's no equity in the house when they repo).
I'm with you on this one. It's all a bunch of hijinx and hand waving as far as I'm concerned. If you think 80/20s are weird, wait until your agent gets into more exotic and creative financing. There's a few 'new' products out there that I don't even remember how they worked now that it's been a while since I bought my house.
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