A Conventional Mortgage requires a minimum down payment of 5%. Because a Conventional Mortgage has traditionally required a 20% down payment, there is a requirement of purchasing Private Mortgage Insurance (PMI) on any mortgage financed greater than 80% of the value of the property. The PMI can be eliminated at any time during the life of the mortgage, once your mortgage debt decreases to 80% or less.
There are also a range of options on how you can structure the payment of the PMI. The PMI can be combined into the mortgage rate which is known as Lender Paid Mortgage Insurance (LPMI). The LPMI generally lowers the monthly amount required for the mortgage payment and a separate payment for the borrower paid mortgage insurance (PMI). There is a higher mortgage interest rate that will result with a lower overall payment associated with an LPMI. The LPMI is also “Baked In” to the mortgage so it cannot be cancelled until the loan is paid off or refinanced.
Because of the high cost of housing in most counties in and around the San Francisco Bay Area, Conventional Mortgage limits are $636,150. In most other parts of the country, Conventional Mortgage limits are $417,000.
How Tam Funding Works
At Tam Funding we recognize that we’re here to support you, the mortgage loan originator so you can keep doing what you do best-closing loans.
We have one objective: MLO Satisfaction
We have four goals for obtaining our objective:
- Lower cost and more profit for MLO’s
- Easier workflow with less hassle for MLO’s
- Fast and efficient turnaround for MLO’s
- A wide selection of lending institutions
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