Private Mortgage Insurance

[jtdoyle1]

I'm pretty sue it's based on 20% of assessed value. I.e. If you aren't paying pmi now and try to refinance and your homes value gas dropped you might end up paying pmi again. I'm also pretty sure if you want to get out paying pmi you have to pay get your house reassessed for current value.

 

[ISUAlum2002]

Too good to post your brilliance with us little people?

No worries....someone else who works in the mortgage industry has already posted in here. (hint, hint)

 

[mred]

Assessed value and appraised value are two separate things. Often, assessed value is not equal to fair market value. PMI is based on appraised value.

 

[twojman]

When we did our refi, we did not have 20% equity. They put the 8.5% as a second mortgage. (We paid it off in a year) The bank we used was Luana Bank, they opened a branch in Western Clive.

 

[djb4cy]

Too good to post your brilliance with us little people?

Sorry, I was not intending intending to come off like that. Just offering to provide a little personal assistance, review the actual documentation and offer a solution, rather than speculate on details of the policy. Most posts are generally heading the right direction, but as several note there are unique terms depending on the type or loan and policy he has.

 

[Gorm]

I didn't "buy out" PMI...I just had a big enough down payment to be below 78% of value.

You might want to consider refinancing. You will usually get a lower interest rate with more than 78 already paid...

 

[Cyclonesince78]

I didn't "buy out" PMI...I just had a big enough down payment to be below 78% of value.

You might want to consider refinancing. You will usually get a lower interest rate with more than 78 already paid...

That's a good point. If he took the loan out in 2009, he could probably find a no closing costs mortgage (including cost of appraisal) at or better than the rate he got in 2009.

 

[Malone]

Is it an FHA loan or conventional? If FHA, you're required to carry mortgage insurance for 60 monthly premiums according to the major investors (freddy, fanny, gnma) regardless of your loan to value.

If conventional, you are usually eligible to have the mortgage insurance removed at 78%. Where I work, we figure loan to value by taking the lesser between the original appraisal value and the purchase price and divide the current principal balance against it. If your purchase price was greater than the appraisal value, we'll use the appraisal value from the original loan to determine loan to value.

For a conventional loan, if your LTV is too high but you feel that market conditions have improved, it doesn't matter. Structural improvements must be the sole reason for valuation increase in figuring a new LTV. Again this is a guideline set forth by fanny, freddy and gnma - not your mortgage company.

Another thing to consider is whether it is a primary or secondary home, as well if it's a 15 year or standard 30 year loan. Hopefully some of this helps.