Let’s assume you’re the median income household in the country today and you’re buying today’s median priced home which is about two hundred five thousand dollars if you finance that twenty percent down with a 30-year fixed rate it would take about twenty six percent of your income so you would qualify assuming everything else in your history is good and you’d be able to afford that because that’s underneath the twenty eight percent threshold that is a good guide for affordability and qualification but if instead you needed to opt to pay just 3.5 percent down and to go with an fha-insured low down payment option you’d end up having to spend thirty three percent of your income to cover the insurance and the higher monthly payment expense you wouldn’t qualify anymore under those standards so the trade-off of having a lower down payment might mean a different kind of home a cheaper home so one sneaky way of answering that question from my perspective is see if you can by looking at a different kind of home put more money down but I know that doesn’t apply to everybody and you’ve probably got some options that you can think of there’s a there’s there many ways to avoid private mortgage insurance without getting too complicated you can do a first mortgage we’re part of the the lien is in firstly in position and you could do a second mortgage to avoid mortgage insurance.

There’s also lender paid mi or mortgage insurance where you take a little bit higher of an interest rate but then you’ll be able to write that off on your taxes so all of these things seem complicated but that’s what we’re going to cover with you the first time that we speak those are the questions working yeah and again that’s why having a mortgage broker that you really trust and a lender who can walk you through the process just is really going to help you get into understanding because it is complex and and to help somebody really educate you this is so important I want to add one other thought for buyers who are in the military or veterans or families of veterans I think it’s absolutely worth exploring what the Veterans Administration offers in terms of a VA loan one of the key attributes of a VA loan is a is no PMI effectively the federal government is picking up the risk that you talked about and there is no PMI with a VA loan and very light down payment.

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