A friend of mine who owns several properties recently told me he purchased a single family home with 5% down and has no PMI.
Im curious if anyone has heard of an offer like this, it almost seems too good to be true.
Have any of you come across any offers like this? and is this even possible?
Sure, @Brandon Gale . A portfolio lender can offer whatever terms they like (within the bounds of laws, rules, and regs). I just saw a BP investor who go 10% down with no PMI.
Ask your friend to introduce you to his loan officer (and then tell us!).
It is all about who you know. If the loan officer trusts you and has done business with you, you can get into a property for whatever they let you. I have seen someone who I work with get a 0% down investment loan for a flip with no PMI. Make connections, and then make good on those connections.
I would ask what the interest rate is and what the closing costs were (such as points). Anything is possible but doesn't mean it doesn't come at a cost.
Some lenders have special programs. In Wisconsin we have a company called Associated bank and they offer what they call a "care product" It's 3% down with no PMI. Best to check with some banks that are local to your area to see what special programs they have.
I talked to him some more about it. Apparently they offered him no PMI for 0.5% more interest, so much lower monthly payment just costs a little more over the life of the loan.
Seems like a great tool if you are trying to cash flow