If we get approved for a certain amount of down payment assistance, could we add more downpayment if we have the funds? I'm just curious if we could possibly remove the PMi or get close to removing it. Thank you in advance.
Yes, you're correct! A client can definitely choose to put down more money than the required amount from their Down Payment Assistance (DPA). This extra money can potentially help reduce or even eliminate Private Mortgage Insurance (PMI). Even if it doesn't get rid of PMI entirely, it could still lower your monthly PMI payments. The reason for this is that the Loan-to-Value ratio (LTV) becomes smaller when you put more money down. A lower LTV means there's less risk for the lender, so your PMI becomes less expensive. For example, a borrower with 89.99 LTV will usually have lower PMI payments compared to someone with 97 LTV. I hope this helps explain things.
