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Are you not sure how much of a down payment to put down on a home? You would need to consider that the figure will need to be at least 20 percent, if you want to avoid paying any Property Mortgage Insurance (PMI). This insurance covers all home buyers that have not deposited at least 20% as a down-payment on the value of their new home in the event you default on your monthly mortgage payments.
The lenders and banks will introduce this insurance as a way of protecting its own assets should the home buyer fall into financial difficulties and not be able to meet payments due. The lender can dip into the insurance funds and use that money to cover any short fall. In the United States it is possible to get private mortgage insurance or one from the government. The government scheme is handled by the Federal Housing Administration (FHA) and a number of companies are available for home buyers to use for underwriting private mortgage insurance.
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How Much Premium Will I Have To Pay?
This depends on the amount of deposit or down-payment you have managed to raise on your new home. The PMI can vary from as little as 0.3 percent of the total value of the property per year, to as much as 1.15 percent. So, if you pay the smaller amount (0.3%) on a home valued at $200,000 you would look to be paying around $600 premium per year. The upper limit of 1.15% would see homeowners forking out $2,300 per year in PMI fees.
But this does not have to be a payment you would have to make throughout the lifetime of your mortgage; when you reach the stage where the loan-to-value ratio hits 80 percent, tell your bank or lender that it is time to stop PMI premiums as you won't need them at this point.
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In fact, its law now that lenders should be telling you when you are likely to reach that 80 percent ratio and federal law insists the premiums must stop when the figure reaches 78 percent. The premiums will automatically be cancelled at this stage and you should not have to chase your lender for this to happen.
However, there are some Federal Hosing Administration loans that insist mortgage insurance premiums be paid for the life of the mortgage.

If you would like more information on Property Mortgage Insurance, be sure to ask your Lender directly.
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The market is always changing and as such, I have learned that I too need to always be changing or at least growing. With that being said, for the past 3-4 months, I have been doing a lot of reading on self directed IRAs. More specifically, the "Private Bank Concept" within the self directed IRA industry. Honestly, this concept amazes me, in fact, I am struggling to understand why more of us in the REO industry aren't cornering this market.

I guess first off, I had to realize that many people don't even know they have the ability to direct their own IRA. I had read somewhere that 3.4 trillion dollars is setting in IRA funds right now across this country and most people (like 99%) aren't making more than 1-2% annually.....if that. Granted, most of these people have their money with some investment firm who has the money diversified in stocks, bonds or mutual funds and they make money by managing those funds for you so, it's not in their interest to tell you, "hey, did you know you can do this better on your own and save the money you are paying us?" so, most of you don't know anything about self directed IRAs. Don't feel bad, as of 3-4 months ago, I didn't either. I don't even remember how or who told me about them so, I can't even source or thank anyone for directing me to this awesome opportunity.....sad but, true.

At this point, it's important to tell you, I am a Realtor, not an Investment Adviser, not a Certified Public Accountant and most definitely not an Attorney (no offense). I am simply a Realtor who is looking to drum myself up more business, make more money and start my own brokerage by the start of 2013. Like any good small business owner, I need to find capital however, I don't want to be tied to the SBA (Government Secured Loans) or tied to a bank, personally, I would like to work with individual investors however, it's tricky. Yeah, I have a proven track record and yeah, I have a great business plan...as told to me by my SCORE counselor but, it's not easy to convince someone to give me their money to grow my business and in return, I will give them their money back plus interest. Let's face it, money is tight these days for us all however, what if I was able to tap into money you aren't using to pay your day to day bills? Ok...so, who isn't living paycheck to paycheck, I get that but, some of us worked hard enough that we have nearly 3.4 trillion dollars that isn't doing much for us and my thinking was, how could I convince people to give me some of that money. My thinking was, what if I told potential investor, Priscilla Penny Pincher that I was able to find a real estate investment (flip) that would net her a 10% return on her retirement money, why would she say no? Ok....yes, I am sure you can think of many reasons to say no but, really.....10% return in 6 months on money that is making 1% return in 12 months, it's a no brainer, right?

Well, that is where the Private Bank Concept with self directed IRA funds comes into play. It's nothing more than a strategy that real estate investors are using to complete more deals than ever before. Basically, it allows me to borrow money from an individual...not a bank, to do my flips with while paying the individual back the money borrowed plus a interest rate triple, quadruple or even quince the rate they are currently getting on the money.

Yes, it's risky, it's real estate and yes, we can't guarantee anything but, we can reduce risk by implementing strong, robust loss mitigation and exit strategies so, risk is minimized. Let's also not forget, the loan you are providing me is secured by real estate....real property so, it's not like you're going into this with no collateral.

So, here I am, learnded (yes, that is my Honey Boo Boo term for the day) about this Private Bank Concept and all I need now are the funds however, I am curious, are any of my REOPro member doing this already? If so, let me know, let's talk, let's exchange resources, let's work on creating our own Private Bank!

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