How To Invest In Real Estate With JUST $5000 | HOW FHA LOAN WORKS
Does FHA Loans Have PMI?
When it comes to securing a mortgage, there are many options available to potential homeowners. One of the most popular choices is an FHA loan, which is backed by the Federal Housing Administration. While FHA loans are designed to make home ownership more accessible, they do come with certain requirements, including the need for Private Mortgage Insurance (PMI).
What is PMI? PMI is insurance that protects the lender in the event that a borrower defaults on the loan. PMI is required for FHA loans because the loan amount is typically higher than the value of the home and the borrower has a lower credit score. PMI is typically paid by the borrower on a monthly basis, but can also be paid upfront in a single lump sum.
How Much Does PMI Cost? The cost of PMI varies depending on the loan amount, down payment, credit score, and other factors. Generally speaking, FHA loans with PMI will cost more than other types of loans, but the added expense may be worth it for some borrowers.
Are There Alternatives to PMI? Yes, there are some alternatives to PMI. For example, some lenders may offer a slightly higher interest rate in exchange for no PMI. Additionally, some borrowers may be able to put down a larger down payment to avoid PMI altogether.
• PMI is required for FHA loans because the loan amount is typically higher than the value of the home and the borrower has a lower credit score.
• The cost of PMI varies depending on the loan amount, down payment, credit score, and other factors.
• There are some alternatives to PMI, such as a higher interest rate in exchange for no PMI, or a larger down payment to avoid PMI altogether.
People Also Ask:
Q: Is PMI required on all FHA loans?
A: Yes, PMI is required on all FHA loans.
Q: How long do I have to pay PMI on an FHA loan?
A: The length of time that you must pay PMI on an FHA loan depends on the loan amount and down payment. Generally speaking, PMI must be paid until the loan-to-value ratio of the loan is below 78%.
Q: Can I cancel PMI on an FHA loan?
A: Yes, you can cancel PMI on an FHA loan if you have paid down the loan balance to below 78% of the home’s value.
Does Fha Loans Have Pmi – How to Choose
This video shows you how to start investing in real estate with an FHA loan and only $5000!
Chandler David Smith has been investing in real estate for the last seven years. He currently owns 99 units of rental real estate and loves helping others learn how to create a passive income through real estate investing. In this video Chandler explains how the numbers work for an FHA loan. He shows you how to calculate upfront MIP and MIP that you have to pay on a monthly basis. He explains why a lot of people will tell you not to do an FHA loan but then he dives into the advantages that come with investing early. He shows you the exact duplex you should look for and explains how this specific duplex could give you a 30% or even 50% return on your initial investment. This video was created to help the first time investor get into real estate investing with only $5000 down! After watching this video you will no longer be worried about all of the negatives that people bring up when referring to an FHA loan or putting a lower down payment on your first investment property.
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