You might not be paying MI/PMI per se, but you're paying for it by way of a higher interest rate. It's called Lender-paid MI (LPMI.) Compare 2 or 3 lenders to see what your total costs and APR would be.
You might not be paying MI/PMI per se, but you're paying for it by way of a higher interest rate. It's called Lender-paid MI (LPMI.) Compare 2 or 3 lenders to see what your total costs and APR would be.
Carefully look over the fees associated with this "no PMI" loan. I was offered a similar loan and a competing lender explained to me how they do it. Traditional PMI can be removed once 20% principal is reached. The "no PMI" loan pays an insurance fee over the life of the loan, once 20% is reached the PMI goes away for the lender and the insurance fee money goes right into the lenders pocket. This was the quick and dirty explanation that I was given, I have not verified it as I did not used the "no PMI" loan so verify.
@Michael Cohen I was told I can get 3.6 percent compared to fha which would around 4.0
There's no way your interest rate is going to be 3.6% nowadays. Or even 4%. For a 30yr fixed 3.5% down multiunit (assuming 740+ credit) you're looking at around 4.5% to 4.75% depending on the market when you lock. If you're score is less than 740, assume a higher interest rate. The only way to get interest-rate anywhere near that point right now for what you're looking to do, is to pay a lot in points. Have you seen any sort of closing cost estimate?
I don't know the whole situation, and it's possible there was just some simple miscommunication, but I'm concerned over what you're saying. I strongly urge you to connect with a few other lenders.
I am in the process of going through a FHA loan myself and things you must know is: if you get any kind of mortgage that your putting less then 20% down, YOU WILL have some sort of PMI or mortgage insurance.
Just got quoted a 30yr fixed loan today @ 5% down, no pmi, no points, 4.125%, $1200 loan costs @300k purchase price.
I'll leave it to you to decide if that's better than an FHA for your situation but there's some market context.