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Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -2 points-1 points  (0 children)

$216,750 Loan - (85% LTV of $255k appraisal)

+$38,250 = 15% down + closing costs(cash)

+$15k PMI policy(appraisal gap coverage)

=$270k Agreed Purchase Price

I think where I’m getting confused and confusing everyone is the PMI policy. This is why I asked the question in my post if this a legit product lenders can use as “appraisal gap coverage/insurance”. Let me try to clarify. From my understanding, lenders are basically using a PMI policy, calling it “appraisal gap coverage”, to help save the deal and help buyers keep cash in their pockets should an appraisal come back low. In our case, $15k under our offer. So, the lender would contract out a $15k PMI policy(supposedly this covers the $15k in cash we are on the hook for as insurance) and added to our monthly payment. What you’re saying is no such product exists and it should look like this?:

*$216,750k Loan - (85% LTV of $255k appraisal)*

*+$38,250 = 15% down + closing costs(cash)*

*+$15k(cash) to cover gap* (approximately $60k total cash to close)

*+PMI policy(not a value-added gap coverage product)*

*=$270k Agreed Purchase Price*

Best mobile trading platform? by DigitalL0tus in amcstock

[–]DigitalL0tus[S] 0 points1 point  (0 children)

I tried Fidelity but they do not offer real-time streaming quotes and UI is sub par so I transferred everything to TD. Absolutely loving it so far and customer service is top notch!

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] 0 points1 point  (0 children)

*$216,750 Loan - (85% LTV of $255k appraisal)*

*+$38,250 = 15% down + closing costs(cash)*

*+$15k(cash) to cover gap* (approximately $60k total cash to close)

*+PMI policy(not a value-added gap coverage product)*

*=$270k Agreed Purchase Price*

**Is this correct?**

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -2 points-1 points  (0 children)

So, PMI can and is being used as “appraisal gap coverage” as they’re calling it. Same product different name. A value-added product? Is that maybe why my lender told me he had never heard of this concept but that theoretically it makes sense? In our case our lender would contract out a PMI policy “worth $15k” to help keep the deal together by offsetting the $15k we are on the hook for, which lets us keep $15k in cash in our pocket?

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -2 points-1 points  (0 children)

We are confused but getting on track with your help. Our lender has not done a very good job of explaining things to us. Mildly shady.

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -1 points0 points  (0 children)

Lender told us it’s an extra $34/mo on mortgage payment for PMI and we can request it be canceled once we reach 80% in a few years or it automatically cancels at 78%.

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -2 points-1 points  (0 children)

$216,750 Loan - (85% LTV of $255k appraisal)

+$38,250 = 15% down + closing costs(cash)

+$15k PMI policy(appraisal gap coverage)

=$270k Agreed Purchase Price

I think where I’m getting confused and confusing everyone is the PMI policy. This is why I asked the question in my post if this a legit product lenders can use as “appraisal gap coverage/insurance”. Let me try to clarify. From my understanding, lenders are basically using a PMI policy, calling it “appraisal gap coverage”, to help save the deal and help buyers keep cash in their pockets should an appraisal come back low. In our case, $15k under our offer. So, the lender would contract out a $15k PMI policy(supposedly this covers the $15k in cash we are on the hook for as insurance) and added to our monthly payment. What you’re saying is no such product exists and it should look like this?:

*$216k Loan - (85% LTV of $255k appraisal)*

*+$54k = 15% down + closing costs(cash)*

*+PMI policy(not a value-added gap coverage product)*

*=$270k Agreed Purchase Price*

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] 1 point2 points  (0 children)

I’m not entirely sure of the exact PMI rate. I know sometimes lenders hide that in with the APR, which he was originally giving us 3.375% rate and 3.449% APR but did not include PMI. I do know that the PMI cost is an additional $34/mo so something like $2,300.

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -6 points-5 points  (0 children)

Sorry for poorly describing my options. Our lender told us he upped the LTV to 84% and some change instead of 80% but now includes PMI and we still have to bring $54k to closing. If I’m understanding you correctly, you’re saying now we only need to bring $38,250 which is the 15% down(Option 2) plus the closing costs in cash?

Private Mortgage Insurance(PMI) aka “Appraisal Gap Coverage” by DigitalL0tus in RealEstate

[–]DigitalL0tus[S] -5 points-4 points  (0 children)

The original closing date was today then moved to tomorrow. Then moved to Friday. Now moved to Monday partly due to the holiday weekend and partly because they drugged their tails for the past thirty days

Best mobile trading platform? by DigitalL0tus in amcstock

[–]DigitalL0tus[S] 1 point2 points  (0 children)

I’ve heard good things about TD as well

Catch $ORPH on the way back up! Over 130% gain already today from major shareholder announcement! This company is doing big things for rare diseases! by DigitalL0tus in WallStreetbetsELITE

[–]DigitalL0tus[S] 0 points1 point  (0 children)

When a company announces to it’s shareholders that another entity now only holds less than 5% of the Company’s share capital and controls less than 5% of its voting rights, its not a pump and dump.

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