Question regarding PMI

[SandEagle]

I know PMI automatically cancels after reaching 20% equity, but can the lender cancel PMI to help avoid foreclosure?


I'm in a neighborhood with a high foreclosure rate. My home equity plummeted and I've fallen into 'negative equity'. Payments are high and it may not be worth keeping the home anymore. Will the bank at least help me remove PMI so I can continue making payments without defaulting? I pay $112 a month for PMI.

 

[dullard]

Originally posted by: rrahman1
I know PMI automatically cancels after reaching 20% equity, but can the lender cancel PMI to help avoid foreclosure?


I'm in a neighborhood with a high foreclosure rate. My home equity plummeted and I've fallen into 'negative equity'. Payments are high and it may not be worth keeping the home anymore. Will the bank at least help me remove PMI so I can continue making payments without defaulting? I pay $112 a month for PMI.

PMI is basically an insurance policy - it insures the bank if you go into foreclosure. You pay the insurance premiums, while the bank collects the insurance payout. PMI is lose/lose for homeowners and win/win for banks.

That said, why would the bank cancel the insurance that pays them money in case of a foreclosure AFTER you tell them you might foreclose?

$112 a month is easy to make - it alone shouldn't case a foreclosure. You can get double that selling plasma.

 

[amdskip]

Good luck with that. How much of a mess are you in?

 

[waggy]

my guess is someone does not read or understand what they are getting. WHY in the hell would they cancel PMI if you are a risk of foreclosure?

 

[lokiju]

Do you have an adjustable rate mortgage?

 

[SandEagle]

Originally posted by: amdskip
Good luck with that. How much of a mess are you in?

nah, i'm actually doing ok. i just wanna lower my payments. i'm on a 30-yr fixed at 5.75%

since everyone's getting help except the people that don't default, i figured i could try to get some help somehow too....

 

[nakedfrog]

Am I the only one who thinks that's a really high monthly PMI payment?

 

[Gooberlx2]

On my mortgage, PMI will be dropped after 7 years of consistent payments, or I reach 20% equity, whichever comes first (at least that's exactly how it was explained to me).

Will the bank at least help me remove PMI so I can continue making payments without defaulting?

Are you actually struggling and at risk of defaulting? Or do you just hate making the same payment for something that lost so much value? Right now you're probably more likely to be able to renegotiate in to a lower fixed rate and possibly longer term loan. I had heard on NPR that some lenders were stretching out people to 40yr fixed loans to help lower their payments.

 

[Gooberlx2]

Originally posted by: rrahman1

Originally posted by: amdskip
Good luck with that. How much of a mess are you in?

nah, i'm actually doing ok. i just wanna lower my payments. i'm on a 30-yr fixed at 5.75%

since everyone's getting help except the people that don't default, i figured i could try to get some help somehow too....

Doubtful. 30-yr fixed at 5.75% is a good loan. And if you're really not having trouble making payments you're just gonna have to take it, along with the rest of us who didn't take out retarded loans.

Originally posted by: nakedfrog
Am I the only one who thinks that's a really high monthly PMI payment?

Seems average to me.

 

[child of wonder]

PMI = flushing money down the toilet each month

You should restructure your budget and start paying extra towards the house. When the housing market rebounds you'll be much closer to shedding PMI.

 

[SandEagle]

well, i am trying to pay down all debt. I just dropped 4K on a cc bill..... have a 3K balance left... so happy.... maybe i should have just dropped that 4K on mortgage principal?

i need to pay about 8K more to reach 20%. i can ride it out, but still why shouldn't i get some form of help for doing everything right?

 

[allisolm]

why shouldn't i get some form of help for doing everything right?

Sorry. The only thing you get for doing it right is you get to pay the bills for everyone who did it wrong.

 

[amdskip]

Ah, trying to get your piece of the pie too. Sign me up for that and my 6.25% mortgage.

Cut out the fat and get that 20%.

 

[lokiju]

Originally posted by: rrahman1
well, i am trying to pay down all debt. I just dropped 4K on a cc bill..... have a 3K balance left... so happy.... maybe i should have just dropped that 4K on mortgage principal?

i need to pay about 8K more to reach 20%. i can ride it out, but still why shouldn't i get some form of help for doing everything right?

Ah, there it is.

The "entitlement mentality".

 

[ultimatebob]

Originally posted by: child of wonder
PMI = flushing money down the toilet each month

You should restructure your budget and start paying extra towards the house. When the housing market rebounds you'll be much closer to shedding PMI.

The problem with paying down the mortgage faster to ditch PMI is that many people's house values are declining faster than they are paying it off!

I know that I'm close to paying off 20% of my original $160,000 mortgage at this point... but the house is only worth $150,000 now and they make you do an appraisal of your house if you try to get your PMI taken off early

 

[Blieb]

LMFAO ... they need your PMI more than ever!!!

 

[BlahBlahYouToo]

Originally posted by: rrahman1
I'm in a neighborhood with a high foreclosure rate. My home equity plummeted and I've fallen into 'negative equity'. Payments are high and it may not be worth keeping the home anymore.

where are you located? just wondering.

 

[child of wonder]

Originally posted by: ultimatebob

Originally posted by: child of wonder
PMI = flushing money down the toilet each month

You should restructure your budget and start paying extra towards the house. When the housing market rebounds you'll be much closer to shedding PMI.

The problem with paying down the mortgage faster to ditch PMI is that many people's house values are declining faster than they are paying it off!

I know that I'm close to paying off 20% of my original $160,000 mortgage at this point... but the house is only worth $150,000 now and they make you do an appraisal of your house if you try to get your PMI taken off early

I'm not talking about trying to drop PMI now, rather being in a better position to shed PMI in 2-3 years as housing prices come back up.

But if the OP has credit card debt he'd be better served knocking that out first. Whatever will get his monthly bills lower overall is the best plan.

 

[ZOOYUKA]

Originally posted by: lokiju

Originally posted by: rrahman1
well, i am trying to pay down all debt. I just dropped 4K on a cc bill..... have a 3K balance left... so happy.... maybe i should have just dropped that 4K on mortgage principal?

i need to pay about 8K more to reach 20%. i can ride it out, but still why shouldn't i get some form of help for doing everything right?

Ah, there it is.

The "entitlement mentality".

QFT