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Old 03-28-2015, 04:19 AM
 
2 posts, read 3,259 times
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Hello,

I am taking a mortgage for $266k and I am having a problem with the mortgage insurance.
My wife's credit score is 750+ but my credit is 719. Long story about why my credit is low but it is on the right track now, I know, I a little late now...
When applying for mortgage insurance, I am seeing a $60 difference between having a 719 and 720.

My lender told me about the difference and then I found this schedule:
https://www.mgic.com/pdfs/71-61210_bpmi_monthly.pdf

We are in the 95% bucket with the PMI being .62% (720+) versus .89% (719-680).
Which is where the $60/month difference comes in.

We did a rapid rescore in an attempt to get another point but I am also worried that too many inquires is just going to lower it a few points (I had another lender do a hard pull the week before). Since Oct 2014, We've had about 5 pulls from going under contracts, pre-approvals, etc.

Is a rescore my only option?
Why are the bucketing differences so vast with a payment? .62% (720+) versus .89% (719-680).
One point is a .27% difference in monthly PMI payment, $60/month is a lot for me.

Am I missing other options for PMI?

I am having my credit pulled again next week to see if it is 720. Would it better to do it on Monday (3/30) or Friday (4/3)? I was thinking the credit unions would update month-end statements by Friday, as I have paid off my credit cards to low balances and paid a few student loans off.
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Old 03-28-2015, 09:14 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
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PMI is priced based on risk. Yes, you are 1 point off, but they have to have a cut-off somewhere. Paying off installment loans doesn't do much, unless there were late payments in the prior 12-24 months.

If you are doing a rapid rescore, your lender will be told when it is done and when they can pull credit. Hopefully, they ran your scenarios thru a credit simulator (called "what if") that estimates score improvement before you pay down or pay off anything.

But in a rapid rescore, you don't choose when to re-pull credit, you are told.
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Old 03-28-2015, 12:52 PM
 
Location: Austin
7,077 posts, read 16,885,085 times
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Most credit scores are updated the first Tuesday of a Month. The two dates you gave will not fall into that time frame. Also, when you do the rapid rescore, you should make sure all your monthly debts have been paid. When you pay your credit cards those change your ratios and can usually bring a higher score.
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Old 03-28-2015, 01:03 PM
 
3,783 posts, read 1,721,467 times
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How about lender paid PMI - no pmi but higher rate?
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Old 03-28-2015, 01:43 PM
 
2,409 posts, read 2,488,355 times
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Quote:
Originally Posted by illtaketwoplease View Post
How about lender paid PMI - no pmi but higher rate?
Bad idea. PMI will drop off but a higher interest rate will not.
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Old 03-28-2015, 03:07 PM
 
3,783 posts, read 1,721,467 times
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It will take 6-8 years for PMI to drop off... , or sooner if value increases - rate is only .375 more on average. makes sense in many circumstances
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Old 03-28-2015, 03:40 PM
 
2,409 posts, read 2,488,355 times
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Quote:
Originally Posted by illtaketwoplease View Post
It will take 6-8 years for PMI to drop off... , or sooner if value increases - rate is only .375 more on average. makes sense in many circumstances
The rate increase depends on the PMI amount. If it turns out to be just 3/8 of a percent, this can work.
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Old 03-29-2015, 03:13 PM
 
2 posts, read 3,259 times
Reputation: 10
Quote:
Originally Posted by SmartMoney View Post
PMI is priced based on risk. Yes, you are 1 point off, but they have to have a cut-off somewhere. Paying off installment loans doesn't do much, unless there were late payments in the prior 12-24 months.

If you are doing a rapid rescore, your lender will be told when it is done and when they can pull credit. Hopefully, they ran your scenarios thru a credit simulator (called "what if") that estimates score improvement before you pay down or pay off anything.

But in a rapid rescore, you don't choose when to re-pull credit, you are told.
I did have late payments in 2011 and 2013 (only because the mail lost them and the lender gives no communication).

If I have one lender pull my credit one week. Would it be same for another lender the next week?

I could wait until the first Tuesday of April to pull credit again. I am not sure when the best time to pull, here is my timeline:

- Loans paid in Feb/beginning of Mar.
- Lender 1 pulls credit Mar 3. 716
- Lender 2 pulls credit Mar 23. 719
- Lender 2 does rapid rescore after I pay credit card down.
- Lender 2 says my credit score is 721 on Mar 27 (not sure if he repulls or if they just tell him)

Problem: If I have another Lender pull my credit, when is the best time to pull for the best change of 720+? 3/30, 4/3, 4/7?

Not even sure if another Lender will see 720+ because of the three pulls in two weeks. But I also paid the loans off if that factors a few points.

Last edited by dseg; 03-29-2015 at 03:27 PM..
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Old 04-03-2015, 11:07 AM
 
191 posts, read 311,416 times
Reputation: 79
Quote:
Originally Posted by illtaketwoplease View Post
It will take 6-8 years for PMI to drop off... , or sooner if value increases - rate is only .375 more on average. makes sense in many circumstances
I wouldn't count on PMI dropping off EVER. I paid off our mortgage in the early 2000's with about 5 years left on it. I asked the servicer MANY times about dropping it and they never would. When I asked, the equity was 50% to 90% and they STILL refused to drop it. So I dropped them. Paid it off. The balance was about $25,000. The usual answer was "the note holder refuses to drop it" so too bad, too sad.
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Old 04-04-2015, 08:05 AM
 
Location: Southern California
4,350 posts, read 4,929,984 times
Reputation: 2129
Quote:
Originally Posted by dseg View Post
I did have late payments in 2011 and 2013 (only because the mail lost them and the lender gives no communication).

If I have one lender pull my credit one week. Would it be same for another lender the next week?

I could wait until the first Tuesday of April to pull credit again. I am not sure when the best time to pull, here is my timeline:

- Loans paid in Feb/beginning of Mar.
- Lender 1 pulls credit Mar 3. 716
- Lender 2 pulls credit Mar 23. 719
- Lender 2 does rapid rescore after I pay credit card down.
- Lender 2 says my credit score is 721 on Mar 27 (not sure if he repulls or if they just tell him)

Problem: If I have another Lender pull my credit, when is the best time to pull for the best change of 720+? 3/30, 4/3, 4/7?

Not even sure if another Lender will see 720+ because of the three pulls in two weeks. But I also paid the loans off if that factors a few points.
It has been a month since the original pull, I'd expect you to start losing points due to frequent pulls by different lenders.
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