Howdy, If you get a mortgage while putting down less than 20 per cent (my case 14 per cent) and then in six months put down more to get past the 20 percent threshold (PMI ends), do you have to apply for a new mortgage? I don't want to lose the rate. But I want to lose the PMI and if possible, lower the payments. Here's the deal. I am one of those idiots who still has hopes some of my tech-stock picks will come back. I don't want to sell at least for now. So I am restricted to putting down about $ 40,000.00 to 50,000. I live in Massachusetts (Boston), and believe it or not, $ 400,000 doest't buy much here. Its incredible!!! Thank you.
For our mortgage you were required to get an appraisal and then they would take away the PMI. We just refinanced when it was worth it and got rid of our PMI that way plus shortened our term and lowered our interest rate by 3%.
For our mortgage you were required to get an appraisal and then they would take away the PMI.iambroke ]]]]]]]]]]]]]]]]]]]]]]] Why would they need a second appraisal when you can tell the LTV simply by subtrcting the loan balance ???? * ** LB 59 """"```--~~ --```'""'''
I have had clients tell me that they bought a home for 160k.......and then when they called the lender to get rid of the pmi the lender sent out THEIR OWN appraiser and the appraisal came back at 150k!!!!.....you will want to make sure that when you buy the home the lender that you get the mortgage from doesnt have a 12 month minimum on the pmi...some do and Flagstar bank is just one example of a lender that does this. I wrote an article about this online but in a nutshell I was approached by a mortgage insurance company that suggested that I obtain Lender status....and then on my refinance transactions convince an appraiser to Undervalue the home in order to require pmi. Why do this? If I did this then the mortgage insurance company that I of course would set my client up with would give me a kickback that averaged 2-3k on each loan. I was told that undervaluing a home looked to everyone like I was being cautious and that there would be little chance of me getting caught. The revenue that I could make doing this would rival what I was making on the loan itself. So, make sure that there isnt a minimum amount of months that you are required to have the pmi and make sure you ask WHO and HOW the value will be obtained.
@Why would they need a second appraisal when you can tell the LTV simply by subtrcting the loan balance ???? Is this a QUESTION? I have no idea what the heck you are talking about. I just stated I needed an appraisal to get rid of PMI-ONLY ONE
Because the value is market driven. The mortgage company is going to cover their butts by requiring an appraisal to make sure the value is still at least $xx. You can call a realtor and get a desktop appraisal. (Compare comps in the area). That will give you an idea if your LTV is at 80% before you spend the $300-400 to get a regular appraisal. But, like willtygart said, before you even start that process check your loan documents and see if there is a minimum length of time you have to keep the PMI.
Because the value is market driven. The mortgage company is going to cover their butts by requiring an appraisal to make sure the value is still at least $xx. jlynn ============ If it was there for an 80% LTV It is still there for an over 80% LTV. Also how could paying down the loan balance have any effect on the market value? THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
Re: Re: Mortgages, PMI, partial repay Ya lost me on the first two. Paying down the loan balance has no effect on the loan value. The OP wanted to know about paying the other 6% (to = 20%) to drop the PMI. Most times the mortgage company is going to want a new appraisal to make sure of the CURRENT value of the house. With any luck, the house will appraise higher than when he bought it, and he won't even have to pay the full 6%.
Re: Re: Mortgages, PMI, partial repay And once again, if the lender sends out its own appraiser, dont be suprised if the value is less then what it was when it was purchased....or at least a considerably less amount then an outside appraiser would do. Washington Mutual was in a lawsuit where its appraisers were getting kickbacks or bonuses for undervaluing homes and keeping PMI on...have dealt with 8 borrowers this past year with this problem from this one lender.
Re: Re: Mortgages, PMI, partial repay ok, i can't help but reply on this one. appraisals are typically good for 2 years. if you pay it down in six months there shouldn't be a need for another appraisal - it would be a matter of calculating the new loan balance against the already done appraisal......yes, LB, i am somewhat agreeing with you.
Re: Re: Mortgages, PMI, partial repay OK hear me out...logic has nothing to do with this..the LENDERS are the ones that require the mortgage insurance and their rules are what you go by. For the MOST part...THEY will send out THEIR appraisal department...you will need to check with the mortgage company first because the information on how to terminate PMI is available. The other thing like I menttioned is some lenders WONT let you terminate PMI.........I totally understand everyone logic but I am telling you from EXPERIENCE...and am not making this stuff up or reading someones guidelines...these are things that have happened in my personal business and happen all of the time.....which is why we have forums...to expose things. I am not getting snippy here.....but you have to remember logic only applies when you are talking theory...and when you are talking mortgages...the golden rule applies.."he who owns the gold, makes the rules"
Re: Re: Re: Mortgages, PMI, partial repay Thats why I suggested calling a realtor for a desktop first. We can get pretty darn close to an appraiser. Jenz, I have never heard of an appraisal being good for two years. Typically we don't even comp house sales over 6 months old, and an appraiser uses those same numbers in their appraisals (OK at least in TX).
Re: Re: Re: Mortgages, PMI, partial repay Logic aside Willty - I thought the PMI laws had changed where they HAVE to allow termination, within certain guidelines ie not being late in the last 12 months. Secondly, here in TX, if an appraiser cant justify his appraisal he can get in some big heat. I did a 2nd once and got an absolutely lousy appraisal (lender sent out). I threw a walleyed fit and did my own and starting hinting at getting TREC involved. The appraiser did a 360 on his amount.
Re: Re: Re: Mortgages, PMI, partial repay NO PMI WITH 20% DOWN...so you "SHOULD" be able to TERMINATE IT when you own 20% of the house...
Re: Re: Re: Mortgages, PMI, partial repay Some lenders require you to keep the pmi for a minimum of 12 months....once again..this is from experience.....have had to go back and refi borrowers (yes at my cost) to get them out of the pmi problem. In CA, for example, the value of the homes are rising so high that someone that put 10% down gaines 20% in equity within 6 months in certain areas and some lenders make them wait for 12 months unless they refi the home or sell it. Unfair, yes, happens, you bet. This is even after two appraisals have been doen supporting the new value from two seperate appraisers! Now if you wanted to refi the home with the same lender.....you can use the NEW value........but to get rid of PMI...nope....not with certain lenders. This is why I suggest checking and reading your paperwork first.....and is another good reason to make sure you dont just "get the low rate" with some mortgage schmuck that isnt going to think of this ahead of time. I personally cost a client 2k in PMI because I didnt check ahead with the lenders PMI policy. Lesson learned but hopefully people reading this post will contact their loan officer and start asking questions and reading the fine print.
Re: Re: Re: Mortgages, PMI, partial repay comps obviously should only be 6 months old, but its often different when your looking at your own property. all that aside, i'm not going to get into a lame speculation argument. best way to avoid it - buy it 80-10-10, no pmi to worry about, just payoff the second when you get the money.
