PMI -- how to eliminate it?

[db]

My house is now at about 74% loan to value, but it's obvious from talking to my mortgage lender that they are not anxious to let anyone off the hook. I'm paying $150/month just for the PMI.

I'm waiting for "the letter" which explains their take on the rules, and I expect it to be stacked against me, since they won't say over the phone what the "rules" are, although they did say the loan is "not seasoned", in other words the loan has to be 24 months old or older to qualify for PMI elimination.

I'm pretty steamed up about this and would like to know if the lender *has* to accept a new appraisal or can they hold out for 24 months?




(CA resident)

 

[mjquilly]

refi?

 

[GasX]

you need to get an appraisal done or refinance. In today's market, you will often find you can eliminate PMI through appreciation rather than paying off the loan. Midol works too...

 

[db]

Yeah, that would work, but not cheap......hmm.

 

[Double Trouble]

My guess would be the lender pretty much has the right to say "you have to wait 24 months", but you have the option of just going out and finding another lender and simply re-finance out of it. If the loan to value truly is at about 74%, you have a decent chance of getting out from the PMI (depending on a lot of factors of course). I'd just tell the lender that if they don't work with you, you'll be forced to drop them and take your business somewhere else.

 

[kranky]

Check this.

 

[CPA]

edit: scratch my answer, go with kranky's response.

 

[WHipLAsh13]

It probably depends on your bank but I was able to get rid of my PMI once I had 20% equitiy in the house. I had it reappraised it appraised at almost 100k more than I purchased it for 2 years ago and bye bye PMI. I went to the bank with the appraisal and within a month or so the PMI was no longer part of my payment.

 

[db]

Originally posted by: Mwilding
you need to get an appraisal done or refinance. In today's market, you will often find you can eliminate PMI through appreciation rather than paying off the loan. Midol works too...

heh, Midol.
If I'm going to waste $150 / month I'd rather spend it on something I like

 

[Vic]

74% LTV based on an appreciated value since loan origination, or the appraised value at loan origination?
If the former, then you will need to either refinance (rates are great so why not?) and get a new appraisal, or go through your existing lender and get a new appraisal.
If the latter, then your lender should have automatically dropped the MI (PMI is a company, like RMIC, MGIC, etc.) at 78% LTV.
However, if MI was required at loan origination (i.e. LTV > 80%), then a lender is allowed to maintain that MI regardless of LTV for the first 24 months of the loan.

edit: oops, read the OP a little closer (sorry, skimmed at first). The lender is allowed to keep the MI in place for the first 24 months of the loan regardless of any new appraised value. You signed a document acknowledging that at your loan closing (in fact, that document states the exact month and year your MI will drop off, provided you make all your payments on time). If you're dead-set on getting rid of the MI early, then look into refinancing. Otherwise, you will have to wait.

 

[Armitage]

Originally posted by: db
Yeah, that would work, but not cheap......hmm.

An appraisal will probably only run $300-$400 ... 2 or 3 months of your current PMI payment.

Or you could go give a few years to Uncle Sam and get a VA loan

 

[db]

Thanks for the info everyone, and Vic you pretty much nailed everything.

My loan *is* 74% LTV based on an appreciated value since loan origination (9 months), and I'd be surprised
if the lender is willing to forgo the 24 months.

Refi seems the way to go, and altho my rate is 4.625% (5 year lock, then adj ea yr) it's the refi charge that will probably determine what I do.

Thanks once again for the good info

 

[JulesMaximus]

Put 20% down or refi. Usually, after 2 years if you haven't made any late payments they will remove PMI if you put say 10% down when you bought it.

I put 20% down on my house though so I didn't have PMI. I had it on our Condo but got the lender to remove it after a year or so.

 

[CPA]

Originally posted by: db
Thanks for the info everyone, and Vic you pretty much nailed everything.

My loan *is* 74% LTV based on an appreciated value since loan origination (9 months), and I'd be surprised
if the lender is willing to forgo the 24 months.

Refi seems the way to go, and altho my rate is 4.625% (5 year lock, then adj ea yr) it's the refi charge that will probably determine what I do.

Thanks once again for the good info

You have 4.625 on a 5 year ARM? You can probably get that on a 15 year fixed right now.

 

[PingSpike]

Try punching your loan guy in the jaw. I hear that works sometimes.

 

[Kelemvor]

Just call up a local (not th eon eyou have your mortgage with) mortgage company or bank or whatever and get refinance info. You should never pay PMI unless you are way over 80%. I just got a 4% on a 5 year ARM last weekend. Had a 6.625 30 year before that. Neither one had PMI on it because we basically took out one loan for the down payment and a second for the actual mortgage....

Saving about $200/mo with the refi.

 

[GasX]

Originally posted by: CPA

Originally posted by: db
Thanks for the info everyone, and Vic you pretty much nailed everything.

My loan *is* 74% LTV based on an appreciated value since loan origination (9 months), and I'd be surprised
if the lender is willing to forgo the 24 months.

Refi seems the way to go, and altho my rate is 4.625% (5 year lock, then adj ea yr) it's the refi charge that will probably determine what I do.

Thanks once again for the good info

You have 4.625 on a 5 year ARM? You can probably get that on a 15 year fixed right now.

or 3.5% and reset the clock on your ARM...