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Old 06-01-2015, 06:06 PM
 
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Anyone with an FHA loan sold to Wells Fargo had the PMI removed?

We bought in 2012 with an FHA loan and put about 4% down. Since then our home has dramatically increased in value (we bought right before the DFW market went crazy) and our current loan to value is 70-75%. Obrviously we would need a new appraisal to prove this, but I'm confident we would have no issue.

I called Wells Fargo and they said they will remove PMI after 5 years (exactly 2 years from now), but the loan has to get down to X dollars, and that wont happen for another 6 years. They don't care what the current value of the home is.

So we are looking at refinancing to get rid of PMI. Ironically, the closing costs come out to almost EXACTLY what we would pay in PMI if we kept going for the next 2 years.

So my question is, has anyone gotten Wells Fargo to remove PMI after 5 years on an FHA based on the current value of the home (via appraisal) vs the loan balance?

It would be the better deal (and easier) to just have it removed in 2 years, but I don't really trust that it will happen, especially given the answer I got today.
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Old 06-01-2015, 09:24 PM
 
Location: MID ATLANTIC
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Besides Well making life difficult, Texas makes for a tough time for a lender to refinance in that state. We will do purchase money loans, but we won't originate a refinance in Texas. Too many pitfalls
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Old 06-02-2015, 07:07 AM
 
Location: Southern California
4,350 posts, read 4,929,984 times
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Quote:
Originally Posted by mSooner View Post
I called Wells Fargo and they said they will remove PMI after 5 years (exactly 2 years from now), but the loan has to get down to X dollars, and that wont happen for another 6 years.
It is based on the original ammortizaton schedule, as they said you have to wait 6 years and not two more. Once you accept is will take 6 years, the 2 year cost recovery time looks good. When looking at a new loan consider you are starting the 30 year schedule over. Are you really saving money if you have to pay an additional 3 years of mortgage payments?
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Old 06-02-2015, 08:31 AM
 
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Quote:
It is based on the original ammortizaton schedule, as they said you have to wait 6 years and not two more. Once you accept is will take 6 years, the 2 year cost recovery time looks good. When looking at a new loan consider you are starting the 30 year schedule over. Are you really saving money if you have to pay an additional 3 years of mortgage payments?
We're selling in 4-6 years regardless. We actually looked at doing a 20 year refinance, and in the end the cost savings was only $2000 4 years from now. Downside of being at the beginning of a mortgage. At the same time, I may not be working next year, so having a little more liquidity each month would be helpful.
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Old 06-02-2015, 08:33 AM
 
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Maybe when you got it, it was removable, now they are there for the life of the loan, unless you can finance into a different loan.

I think the old rule was when you had 80% of the loan you could remove it, now they lowered the PMI rate but it's for the life of the loan.
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Old 06-02-2015, 09:13 AM
 
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Before 2013 it could be removed. We bought in 2012. Wells Fargo has said they will remove it, but not until our loan reaches the 78% balance. My question was would they reconsider if we reappraised and proved that the value of the home has increased 20-25% in the past 3 years (which it has) and thus our loan to value ratio was in reality closer to 70-75%. Sounds like the answer is no and I'm not going to trust Wells Fargo if they say maybe, so I guess we are refinancing.
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Old 06-02-2015, 09:31 AM
 
15,385 posts, read 8,679,661 times
Reputation: 13769
Quote:
Originally Posted by mSooner View Post
Anyone with an FHA loan sold to Wells Fargo had the PMI removed?

We bought in 2012 with an FHA loan and put about 4% down. Since then our home has dramatically increased in value (we bought right before the DFW market went crazy) and our current loan to value is 70-75%. Obrviously we would need a new appraisal to prove this, but I'm confident we would have no issue.

I called Wells Fargo and they said they will remove PMI after 5 years (exactly 2 years from now), but the loan has to get down to X dollars, and that wont happen for another 6 years. They don't care what the current value of the home is.

So we are looking at refinancing to get rid of PMI. Ironically, the closing costs come out to almost EXACTLY what we would pay in PMI if we kept going for the next 2 years.

So my question is, has anyone gotten Wells Fargo to remove PMI after 5 years on an FHA based on the current value of the home (via appraisal) vs the loan balance?

It would be the better deal (and easier) to just have it removed in 2 years, but I don't really trust that it will happen, especially given the answer I got today.
Not going to happen. I live in the same area, with an FHA loan. My mil works in the loan business, and current value means nothing with regards to this. I think it's a great thing, since a bubble is what caused a lot of the housing crisis.

We're getting around the PMI thing by paying more each month, so at 5 years we'll have the correct percentage to get PMI removed.
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Old 06-02-2015, 10:12 AM
 
Location: St Thomas, USVI - Seattle, WA - Gulf Coast, TX
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Refinance. This will be the only way to remove the PMI during the time that you plan to own the house. They will not accept a current appraisal when considering your LTV without an official refinance. The original appraisal that is attached to your loan is the only thing they'll use. Your loan type for refinancing (30-yr, 20-yr, 5/1...) doesn't really matter much, when you consider that this is a short term investment. If you plan to be there for only 4-6 more years, and you're confident that your home will retain its value over that time, then just get yourself a monthly payment that you're happiest with and get that wasteful PMI off of there. Best of luck!

Last edited by IslandCityGirl; 06-02-2015 at 10:56 AM..
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Old 06-02-2015, 10:43 AM
 
3,317 posts, read 7,251,326 times
Reputation: 4095
Quote:
Originally Posted by mSooner View Post
Anyone with an FHA loan sold to Wells Fargo had the PMI removed?

We bought in 2012 with an FHA loan and put about 4% down. Since then our home has dramatically increased in value (we bought right before the DFW market went crazy) and our current loan to value is 70-75%. Obrviously we would need a new appraisal to prove this, but I'm confident we would have no issue.

I called Wells Fargo and they said they will remove PMI after 5 years (exactly 2 years from now), but the loan has to get down to X dollars, and that wont happen for another 6 years. They don't care what the current value of the home is.

So we are looking at refinancing to get rid of PMI. Ironically, the closing costs come out to almost EXACTLY what we would pay in PMI if we kept going for the next 2 years.

So my question is, has anyone gotten Wells Fargo to remove PMI after 5 years on an FHA based on the current value of the home (via appraisal) vs the loan balance?

It would be the better deal (and easier) to just have it removed in 2 years, but I don't really trust that it will happen, especially given the answer I got today.

FHA Mortgage Insurance can be written off on your Schedule A of your income taxes (not always, but a lot of the time). I'm sure you don't want to go into your finances too deeply here, but if you use a CPA, check on this before spending time and money on a refinance. There are some rules involved, and Texas is a very Singular Animal in the world of mortgage, but you might look into this before taking action.

Also, I don't think we know what your current rate is on your existing loan, and how that might compare to a new loan. So, to flesh this out: what is your current rate, loan balance, and how much do you think the house is worth today?
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Old 06-02-2015, 12:34 PM
 
Location: Southern California
4,350 posts, read 4,929,984 times
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Quote:
Originally Posted by mSooner View Post
We're selling in 4-6 years regardless. We actually looked at doing a 20 year refinance, and in the end the cost savings was only $2000 4 years from now. Downside of being at the beginning of a mortgage. At the same time, I may not be working next year, so having a little more liquidity each month would be helpful.
Since you're staying for only a few years, how about an ARM?
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