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Didn't they change the rules on PMI that said it stays on for the life of the loan, no matter what? I think that rule change was 1-2 years ago? So he'd have to refi to get out if that were the case, right? But if it's an older loan, you're probably on the old rules.
Chunkymonkey
Recent FHA-insured loans require payment of mortgage insurance premiums for the life of the loan. FHA mortgage insurance premiums can't be canceled. Instead, you have to refinance the loan.Quote:
Originally Posted by Dave_L
That's nutsQuote:
Originally Posted by DenverGP
Also why a conventional was better than a fha etc for us.
What is your rate/term?
If you can get a lower rate with a re-fi, just put the cost of the appraisal towards that.
Did one re-fi with AmeriSave and one with these guys (local)...
http://www.cmgi.web-loans.com/
Didn't even need an appraisal on the last re-fi. Notary came to the house for about an hour and I was done. They credited some costs but still had to out of pocket pre-paids.
As Denver GP said, FHA requires the PMI for the life of the loan, no matter what. I was able to get out of mine in about two years, mostly because the market value of the house shot up so much. I refinanced into a conventional loan with Bellco (a lot of people have horror stories about Bellco, but I've had no issues). The value of the house went up a lot, but not enough to completely wipe out the PMI. Instead, since I was much closer to the 80/20 threshold, the amount I paid for my PMI went from something like $129 a month to only $31 a month. I made big payments on my mortgage to get it to the 80/20 threshold sooner, and once I got there, I let them know and they dropped it. I went into the refi with the express intent of getting rid of the PMI. I made sure that I could nix the PMI, and that there was no early payoff penalties. Like Kwando, I had to shell out $450ish for an appraisal and I wrapped that into my refi. Once I got to 80/20 I called Bellco and asked what they needed. They wanted a written letter or fax. I complied and they dropped the PMI completely. Good luck, it's a great feeling once it's gone!
if you decide to refi (don't know your rates, terms, etc.) look at providentfunding.com i've refi'd twice with them, and they beat everyone else that i could find at the times.
I didn't shop around for my refi and ended up paying about $3,000 for closing costs that probably could have been avoided as a result. When I refi'd I did a streamline and with the closing costs ended up nearly back at where I started. I was able to completely get rid of the PMI in about six months though, so it was still worth it for me. All that to say that you should definitely shop around for the best deal.
If you have a FHA loan - have to refinance to get rid of it.
If you have a conventional - need to be 2 years since the date the loan funded and at least 80% loan to value. If those cases - should be able to call bank and request it be removed if it doesn't get removed on its own.