How can I get rid of pmi on my new home loan?
Home Mortgage
the frog asked:
I know NOIC give a loan without pmi to first time home buyers. I am with National city. How can I terminate this problem to avoid this extra amount on my loan?
David
I know NOIC give a loan without pmi to first time home buyers. I am with National city. How can I terminate this problem to avoid this extra amount on my loan?
David
March 13th, 2009 at 9:04 am
Ray
You probably will have to refinance.
You probably wont be able to refinance.
You are probably stuck unless you can come up with 20%.
March 15th, 2009 at 8:11 am
Franklin
Normally, you have to pay down the balance to a certain amount. Often time, they require you to have at least 20% equity in your home and then you can have National City review your account to remove the PMI.
March 16th, 2009 at 6:28 am
Wanda
To rid yourself of PMI you do not need to refinance! But, you MUST have at least 20% equity proven to the lender based upon an appraisal. You aren’t likely to have 20% equity on your new home loan unless you put 19.75% down when you bought the property. If you got an FHA loan, you have to pay PMI for a minimum of 5 years regardless of your equity.
March 17th, 2009 at 8:36 pm
Bertha
If you do not have 20% down, then you have to pay a PMI.
But there is a way around it, which you will have to refinance. You can do an 80/20 loan, which is two loans - 1 loan is for 80% of the home, and the other is 20%.
But that 20% loan isnt a typical loan, its usually a home equity loan (there may be others, but this is the most common) but at least your payment is tax deductable, and you can set it up, where you dont have to just pay the interest - you can actually pay off the balance also. So instead of paying PMI, that money is going to the 20% loan and is also tax deductable.
March 20th, 2009 at 8:51 am
Louis
At the time of closing/settlement/escrow, IF you were provided with an amortization schedule AND you have an open-end mortgage without any pre-payment penalty, this should be easy enough to accomplish.
If you don’t know how the amortization schedule works, ask the folks at the lending institution to explain it to you - in plain, every day English.
When you pay-down the mortgage to 79% of its original amount AND send a letter with that check, requesting the PMI be dropped, the mortgage company should reduce the monthly payment or bi-monthly payment.
It all depends on the type of mortgage you have.
Thanks for asking your Q! I enjoyed taking the time to answer it!
VTY,
Ron Berue
Yes, that is my real last name!
March 21st, 2009 at 12:58 pm
Jessie
Your best bet is to wait it out. Most PMI’s drop off after a year of consistant payments.
March 24th, 2009 at 6:39 am
Nathan
anything to do with refinancing will cost$$$$$$$$$$$$$$$ this is where the banks make $$$$$$$$$$$
March 26th, 2009 at 2:17 pm
Claude
PMI will stay on the loan until you pay 20% of your loan amount down on most loan programs. On a FHA 30 year you must keep the PMI for 5 yrs regardless of your equity. VA and Rural Development loans do not have PMI. There are lender paid MI programs which may be what you are thinking of with the other lender you mentioned. When a client chooses this loan option the rate is higher but your overall payment is less. Effective this year PMI is tax deductible for certain household incomes.