Can I buy a house that's bank owned using a conventional mortgage?

HomePath only finances properties designated as HomePath eligible.. It's very specific and only represents a very small percentage of the market, so you cannot just drive through a neighborhood, pick a home and use HomePath.. it doesn't work that way.. The advantage of HomePath is that no appraisal is required and there's no PMI. But lenders offering this type of financing for these specific properties have pretty high pricing adjustments, and typically your interest rate is far above what non HomePath loans are being priced at, effectively netting you about the same payment as if you purchased a home using conventional financing, but paid PMI. With conventional financing, you can purchase any home with just 5% down, but you will have to pay PMI. The only way to avoid paying MI is to put 20% or more down, but you shouldn't be worried about paying PMI, since it's very inexpensive and it can be canceled. With a good credit score, the monthly PMI payment for every $100K financed is below $57 per month.. and with conventional financing, once you have paid PMI for 2 years, and once you have obtained 20% equity, you can ask to have the PMI removed, and you wont be required to refinance to do it.. The MI rates are even lower if you put 10% or 15% down.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Put 20% down, and use conventional financing.

I liked everything that William said and I tend to agree but would add one thing. We can get one time MI and put less than 20% down and that makes a lot of sense if you stay in the property less than 5-6 years but if you stay longer and enjoy good appreciation, removing MI is better in the long run. I am in CA and only lend in CA and I am at (866) 385-1650 or AskTheLoanMan.com

One lender here mentioned one-time MI. I think he was refering to Lender Paid MI - LPMI - which is where you can take a slightly higher interest rate and the lender will pay off the MI for you. For example, if the rate is 4.25%, and you want LPMI, the rate may be about 4.625%. Your monthly payment at the higher rate might be $50-70 more per month (based on whatever the loan amount is) but if your MI was going to be $120-$150 a month, you come out ahead. But as others have mentioned your other option is to just pay the MI and try to get it removed in 2 years. Have a talk with a lender to discuss your options, and see which works better for you. I'm Marty Stern, with Homestreet Bank, in Sonoma, CA, but I do loans throughout all of California.