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If you got your FHA loan in 2005, you should NOT have lifetime MIP. It is more likely a term (i.e. 5 years) and a LTV of the original purchase price (not an appraised value) at or below 78%.
You might want to dig up the paperwork you signed.
If you got your FHA loan in 2005, you should NOT have lifetime MIP. It is more likely a term (i.e. 5 years) and a LTV of the original purchase price (not an appraised value) at or below 78%.
You might want to dig up the paperwork you signed.
If you got your FHA loan in 2005, you should NOT have lifetime MIP. It is more likely a term (i.e. 5 years) and a LTV of the original purchase price (not an appraised value) at or below 78%.
You might want to dig up the paperwork you signed.
I have a FHA loan and I refinanced in 2004. My PMI was removed on that mortgage some time last year. I received a letter from the lender with congratulations no more PMI. So I would think a FHA drawn in 2005 would also qualify at some point.
I have a FHA loan and I refinanced in 2004. My PMI was removed on that mortgage some time last year. I received a letter from the lender with congratulations no more PMI. So I would think a FHA drawn in 2005 would also qualify at some point.
I ask them once a year at least and they send me a letter stating it's forever.
I may very well be wrong, but I believe that PMI is for the life of the loan if it's FHA. Only if it's conventional can you have it removed once it goes below 80%. If I'm correct you would need to refinance to get rid of it.
Back to the OP's question (since he already told us his loan is conventional, not FHA -- see post #4 of this thread) ...
Quote:
Originally Posted by udinthrik84
I got my loan last year. about 6 months ago I made a large extra payment that got me below 78%
I have never missed payments, but my loan does get sold constantly. Each time it has been sold no terms have changed. I'm in a flood zone, could that be it? I asked them about the notice and they said that requirement is only set on the original loan servicer and not required after the loan has been sold.
I don't see how that could be possible (or legal!) ...
Quote:
Originally Posted by udinthrik84
I'm pretty sure i'm being screwed here. I found a sheet in my original closing paperwork that says if the loan is sold I am required to negotiate terms with the new servicer, but whenever I get a notice that it is sold, the letters have always said no terms have changed. I have copies of all these letters. I think I'll be calling a lawyer.
Never heard of that (boldface) -- and again, I don't know how that could be legal???! They're saying you have to agree to terms that you don't even KNOW and did not agree to at the time that you got the loan.
I have had loans that changed servicers, but that was just the company that SERVICED the loan. My original loan terms were not affected at all.
OP, I also just went through removal of PMI with my lender. I got the loan in 2012 and only put 5% down. I've been paying a lot extra just about every month so got it down to 80%; that's the point at which you can ASK for PMI to be removed (although they don't have to agree AND may require an appraisal). All I did was send an email to the lender asking that it be removed since I was now below 80%. They emailed me back saying "Congratulations" and sent me the official documents a week or two later. No appraisal needed, no paperwork, nothing! I also got a small refund for PMI I had already paid after the loan got below 80%. (Then again, my lender is a small regional lender in New England and their customer service is great!)
Something sounds really "off" in your situation. Oh, I DID get the letter from the lender every year; they were required to send it, and they did.
Back to the OP's question (since he already told us his loan is conventional, not FHA -- see post #4 of this thread) ...
I don't see how that could be possible (or legal!) ...
Never heard of that (boldface) -- and again, I don't know how that could be legal???! They're saying you have to agree to terms that you don't even KNOW and did not agree to at the time that you got the loan.
I have had loans that changed servicers, but that was just the company that SERVICED the loan. My original loan terms were not affected at all.
OP, I also just went through removal of PMI with my lender. I got the loan in 2012 and only put 5% down. I've been paying a lot extra just about every month so got it down to 80%; that's the point at which you can ASK for PMI to be removed (although they don't have to agree AND may require an appraisal). All I did was send an email to the lender asking that it be removed since I was now below 80%. They emailed me back saying "Congratulations" and sent me the official documents a week or two later. No appraisal needed, no paperwork, nothing! I also got a small refund for PMI I had already paid after the loan got below 80%. (Then again, my lender is a small regional lender in New England and their customer service is great!)
Something sounds really "off" in your situation. Oh, I DID get the letter from the lender every year; they were required to send it, and they did.
As already discussed, it is likely the length of time the OP has had the loan. Many lenders require you to have the loan for at least TWO years before they will remove PMI. And to remove PMI at two years, you may have to have 75% LTV instead of 80%.
I'm attaching PMI removal policies from two large lenders who also service loans. I checked Wells Fargo, Bank of America, Citi, US Bank, and Ditech's websites, but they did not provide the information without logging in or calling.
In order of attachment: Quicken Loans, Chase
As already discussed, it is likely the length of time the OP has had the loan. Many lenders require you to have the loan for at least TWO years before they will remove PMI. And to remove PMI at two years, you may have to have 75% LTV instead of 80%.
I'm attaching PMI removal policies from two large lenders who also service loans. I checked Wells Fargo, Bank of America, Citi, US Bank, and Ditech's websites, but they did not provide the information without logging in or calling.
In order of attachment: Quicken Loans, Chase
Oh, I realize it may very well be the two-year "problem" ... but in that case, it seems like the lender would have (or should have!) just SAID so. I mean, there's no loan officer or underwriter judgment involved, no appraisal, no math, even -- just a statement that he has not had the loan for at least 2 years. Seems simple, no?
I am trying to remember what my lender said in the letter I got every year -- just looked for it for a couple of minutes, but since I no longer need it, I think I recycled it. It definitely had provisions about 80% vs. 78% (80% you have to ask for removal, 78% it's supposed to be automatic) and about payment history, etc. I don't remember if it had a 2-year rule (might not have noticed since it didn't apply to me).
But I just looked again at the 2 items you posted; I think the OP is asking for PMI removal based on his LTV now being below 78% of the original property value -- i.e., he has not said he is doing this based on improvements he has made. Neither of the items you posted say anything about a 2-year rule for those who are using the original property value (NOT using a "new" value based on improvements etc.).
I am also very curious about the other provisions that the OP mentioned, the ones I boldfaced when quoting him. I can't see how they are legal. Only the original servicer has to abide by PMI rules? The loan terms can change every time the loan is sold to a new servicer? Those things don't make sense to me. Hope the OP can come back and clarify.
But I just looked again at the 2 items you posted; I think the OP is asking for PMI removal based on his LTV now being below 78% of the original property value -- i.e., he has not said he is doing this based on improvements he has made. Neither of the items you posted say anything about a 2-year rule for those who are using the original property value (NOT using a "new" value based on improvements etc.).
.
It sounds as if paying ahead will require a new appraisal, regardless if improvements were made. Think about it- you bought in 2006, got to 80% LTV according to purchase price in 2008- you were probably now at 140% LTV.
Copied and pasted
QL States: If you do this (*pay mortgage down*) ahead of your mortgage payoff schedule, you can purchase an appraisal that we’ll order on your behalf. This new appraisal will have to show that your LTV is under 80% for you to qualify for PMI removal.
This is what the OP is doing. Paying it down ahead of schedule. So, for QL, you have to look at the appraisal section. I believe you are correct about the OP not improving the property. So, OP would have to qualify for bullet #1 or bullet #2 since bullet #3 is about improvements.
Bullet 1 (copied and pasted)
Your current LTV is higher than 80%, you have a good payment history and you’ve had your loan for at least two years. Your appraisal will have to show that your new LTV is 75% or lower. Most Likely Category
Bullet 2 (copies and pasted)
Your current LTV is higher than 80%, you have a good payment history and you’ve had your loan for at least five years. Your appraisal will have to show that your new LTV is 80% or lower.
******
Chase (copied and pasted)
For a single-family, owner-occupied residence, you may be able to cancel PMI if:
Your account is at 80% LTV based on the amortization schedule provided at your loan closing and you’re using the original value of your property. Plus, you’ve not made any 30-day late payments within the past 12 months and any 60-day late payments in the past 24 months. (OP would be inelligible because he is ahead of the amortization schedule.)
If we review the LTV using the current value of your property, you may be eligible to cancel PMI if:
Your loan is less than two years, your LTV is 75% and you’ve made significant improvements to the property No improvements
Your loan is between two and five years and your LTV is 75% or less Likely Category
Your loan is older than five years and the LTV is 80% or less
You’ve not made any 30-day late payments within the past 12 months and any 60-day late payments in the past 24 months.
**** They are both saying the exact same thing, only in different ways.
In a summary, to remove PMI
- Under 2 years- MUST have improvements
- Between 2 years and 5 years- MUST have 75% LTV and good payment history
- At least 5 years- MUST have 80% LTV and good payment history
I suspect the PMI removal is more of a Freddie/Fannie thing, not the individual bank/servicer. But I'm not in mortgages, so I could be wrong. One of the other major banks I looked up did mention seasoning the loan, but not exacts. You had to call.
It sounds as if paying ahead will require a new appraisal, regardless if improvements were made.
Yes, I get that part. My letter said the same thing (although my lender didn't require an appraisal, and my letter said "may require an appraisal" for the 80% level, with PMI removal being automatic at 78% -- no appraisal required). The purpose (according to my lender, anyway, referring to the 80% level) was to make sure the house value had not gone DOWN -- not to see if it had gone up.
RE: the rest: I am reading those documents VERY differently than you are. I am reading them as different situations: the first for those who are using the ORIGINAL value of their house (which may, or in these banks' cases will, require an appraisal anyway) and the second for those using a NEW value based on improvements they have made. For example, in Quicken, it specifically says for what I am calling the second category "If you think your home's value has increased ..." That's a different situation from the original paragraph, which is in its own "box" (another reason I took it to be a separate category) and does not say anything about the house value having increased.
Same with Chase. The first bullet is BY ITSELF and is for people using their original house value. The second bullet is a SEPARATE CATEGORY for those who have made improvements and want to eliminate PMI based on those (mentions "current value").
Does this make sense? I think they are 2 different categories and the OP should have automatically qualified for the first category (his LTV is now below 78% of his original house value, according to the appraisal done at the time of the loan).
Quote:
Originally Posted by jaynarie
...
They are both saying the exact same thing, only in different ways.
In a summary, to remove PMI
- Under 2 years- MUST have improvements
- Between 2 years and 5 years- MUST have 75% LTV and good payment history
- At least 5 years- MUST have 80% LTV and good payment history
I am just reading them very differently. I could very well be wrong, but you now have me very curious. (I can't figure out why Quicken would have 2 entirely separate boxes unless they are separate "categories" of how to qualify.)
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It definitely had provisions about 80% vs. 78% (80% you have to ask for removal, 78% it's supposed to be automatic) and about payment history, etc. I don't remember if it had a 2-year rule (might not have noticed since it didn't apply to me).
