Primary Mortgage Insurance is outrageous on my loan, what can I do?
2007-09-06 02:48:13 · 6 answers · asked by fuzzyfatrabbit 2 in Business & Finance ➔ Credit
I am in the same boat.
If your mortgage is with F.H.A. you are required to have this until you have had the loan for 5-years at that point if your balance is below 80% of the value of your home you can drop it.
My balance is well below 80%, was when I took out the loan but I still have to pay this until 5-years have passed. Another 2-years for me.
2007-09-06 03:03:48 · answer #1 · answered by ? 7 · 0⤊ 0⤋
Depends. If you're home's value has not gone up, then you may be stuck unless you refinance. The PMI program selected may be amended, but maybe not. Remember, PMI (which is Private Mortgage Insurance vs. federal programs such as FHA and VA) is for the benefit of the LENDER, in case you default. If the lender's coverage is 25% of the original loan, your PMI premium may be higher than say a 'top 15%' of the principal...which only makes sense because the premium would be higher to cover more. You'll probably get smart "A" answers to your question such as 'just pay more down on your principal in a lump sum to get it under 80% LTV (loan to value), but that may not be do'able with you. If you think it makes sense to finance to a fixed rate if you're on an ARM, then maybe you get your parents to 'gift' you some of the equity to avoid PMI altogether. The only good news about PMI is that it is now deductible on your tax return, but check with your accounting professional to be sure as I cannot give professional advice officially. Good Luck.
2007-09-06 10:00:56 · answer #2 · answered by gato_del_sol_3 4 · 0⤊ 0⤋
This is a trap that is used on buyers, usually first time buyers who have less than 20% to put down. If you are in this category it was probalby required. However after making payments for a few years you can often have them waive this by requesting it. PMI is strange in that the amount stays the same as the mortgage declines.
2007-09-06 10:00:23 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Even if the value of your home has appreciated greatly, you won't be able to get rid of the PMI till you have paid down 20% of the original mortgage. It's in the fine print.
If your house value has gone way up, you could refi to get rid of the PMI.
2007-09-06 11:19:32 · answer #4 · answered by bdancer222 7 · 0⤊ 0⤋
If there is no prepayment penalty and you have the money you can lower your mortgage so that you have more than 10% of the mortgage value for yourself. You would probaly need a new assessment of your house.
2007-09-06 09:58:59 · answer #5 · answered by DrIG 7 · 0⤊ 1⤋
You agree to the amount when you sign the mortgage... you cant lower it.
If you have 20% equity, you can refinance to get rid of it... usually, you have to keep it for a certian number of years to get rid of it without a refi.
2007-09-06 09:59:09 · answer #6 · answered by Mike 6 · 0⤊ 0⤋