Get rid of PMI??? - Posted by Jay(OR)

Posted by BigV on May 23, 2007 at 11:37:01:

here is the PMI calculator, as an FYI

Get rid of PMI??? - Posted by Jay(OR)

Posted by Jay(OR) on May 23, 2007 at 02:40:00:

I am getting a loan for $162,000. Purchase price of $188,000. Appraisal upon purchase of $225,000.

Lender is telling me that Private Mortgage Insurance is based on purchase price, and because I am putting only 10% down, I will have to have PMI.

Does anyone have any ideas on how to get rid of this PMI payment either right away, or soon after closing? Besides putting 20% down?

Thanks, please let me know if you have any ideas! Thanks, Jay(OR)

Re: Get rid of PMI??? - Posted by Dave T

Posted by Dave T on May 25, 2007 at 19:11:29:

I had the same problem. Appraised value was higher than purchase price, but I only put 10% down. PMI was required even though loan balance was only 70% of apprlaised value. I immediately requested cancellation/waiver of PMI as soon as the loan closed based upon higher appraised value.

The lender told me that I either had to pay down the loan balance to 78% of the original loan amount OR request a cancellation based upon a new appraisal after 24 months of on-time payment history.

I chose the 24 month route and requested cancellation two weeks before I made the 24th payment. I had to pay for an appraisal ordered by the lender, and got my approval to cancel PMI on the day my 24th payment was made.

The lender was Countrywide.

Re: Get rid of PMI??? - Posted by Stan (ga)

Posted by Stan (ga) on May 23, 2007 at 09:15:14:

Do an 80/15/5. That should eliminate your PMI.

Re: Get rid of PMI??? - Posted by dealmaker

Posted by dealmaker on May 23, 2007 at 07:41:48:

I would either put more down or pay as much additional principle every month as I could afford. IIRC the rule on reappraisal changed a couple of years ago and I think it now has to get paid down to 78 or 79% AND YOU WILL PAY FOR A REAPPRAISAL.

PMI is one of the biggest ripoffs ever IMO. YOU are paying to insure the LENDER. I only ever paid it once and it was because of our wildly fluctuating incomes (both were commissioned sales people. We did a 5% down loan and then slammed everything we got in commission onto the principle. When I called the bank in the FIFTH MONTH of the loan they were shocked. But they dropped the PMI right away. Back then it was still at 80% and so such a new loan that there was no appraisal required.

It’s funny how people were work and slave to save 1/4 of one percent on a loan, or get a better discount on the price of the house, but then blindly throw all that away on PMI (about .8% now I think).

I’d put the extra 10% down even if I had to borrow it from the credit union.