No. of Recommendations: 2
Hi gol,

but I travel a lot for work.... so what happens if I need to move to another country for a few months just 3 days after I purchase the property?
Same thing as for anyone/everyone else who might have that happen; "Oops! O siht, boss... I *just* closed on a new home here in the area, can the company cover the costs I'm incurring?"

Happens with professional athletes all the time. (Side story; My back-door neighbor last summer was Josh Brown. He paid full list, $1.4M, for one of the nicest homes on our block... then the Jets cut him. He busted arse, got a spot on the Cleveland squad, won the NFL special teams player of the week at the end of the season... and got cut again for a younger player... then finally nailed & got signed a spot on the NY Giants. Cross-country commuting is commonplace for the pros, but he (actually more likely his wife) decided he actually wanted a bigger place for the kids. They listed the place, and sold it in 3 months at a slight uptick.)

In my job there is a high probability of that happening. And it would be short-sighted from the lender not to allow me to rent it under those conditions. My goal is to live there, yes, but if I'm out of town, I should not be forced to lose money simply "cuz I just bought it".
Win, lose, or draw money... that's up to you. The lender's not "forcing" you to do anything but keep your agreement.

Also, how can you get no PMI with only 5% down?? That surely caught my eye. As per my lender, conventional mortgage loans require at least 20% down in order to avoid PMI. Is there a specific type of loan that has this "5% down gets rid of PMI" characteristic? Or is this "20% down or PMI" story the typical lender scam?
Not exactly a "scam" story... simply ignorant.

When we're talking about less than 20% down...
You can get a portfolio loan where the lender self-insures.
You can get a loan with monthly-paid PMI (this is what you've heard about,)
You can get a loan with single-premium MI,
> You can pay that single premium from your own cash at closing,
> You can pay that single premium from seller contribution cash at closing,
> You can pay that single premium from lender rebate at closing,

By the way, PMI is evidently a scam in itself born out of greed and banks making the rules. Why pay mortgage insurance? If i stop paying the mortgage they get my house, keep my down payment and kill my credit. Isn't that enough?
Yes, it *IS* enough... *IF* you have at least 20% equity.
That's the entire point of mortgage insurance... covering the risk to the lender of your default without sufficient equity (after all legal costs & firesale discounts) to recover their principal.

Ray & AJ covered the rest quite well.

Dave Donhoff
Leverage Planner
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