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Old 07-01-2012, 12:51 PM
 
39 posts, read 49,827 times
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Hubby & I are bouncing ideas around if we decide not to sell at the present time.

We are five years in so have another 25 yrs on our loan. Our PMI for our original mortgage of $196k is $310 per month. Pretty steep IMO.

If we refinanced would the PMI be lower now based on the fact we don't owe as much. I know we won't be at the 20% threshold to have it removed. But, lowering it would help with our idea to refi into a 15 yr loan and get this house paid down faster.

Our int. rate is LOW - 3.8%. So, not thinking we can be any better on that end.

Any thoughts?
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Old 07-01-2012, 02:05 PM
 
Location: Columbia, MD
553 posts, read 1,481,252 times
Reputation: 392
Quote:
Originally Posted by wakefield622 View Post
Hubby & I are bouncing ideas around if we decide not to sell at the present time.

We are five years in so have another 25 yrs on our loan. Our PMI for our original mortgage of $196k is $310 per month. Pretty steep IMO.

If we refinanced would the PMI be lower now based on the fact we don't owe as much. I know we won't be at the 20% threshold to have it removed. But, lowering it would help with our idea to refi into a 15 yr loan and get this house paid down faster.

Our int. rate is LOW - 3.8%. So, not thinking we can be any better on that end.

Any thoughts?
You can look into a second trust mortgage (80/10/10) - PNC bank and BB&T bank are the 2 which offer them. Right now the second trust is between 4-5% depending on creditworthiness, so if you have > 10% equity this is a great refinance option to get around PMI.

Also, you can work with a mortgage broker to find a lender which allow upfront PMI, so you pay ~1% of your refi balance but no monthly PMI from that point forward.

If you have good credit, good DTI, steady income, and some assets to show, it should not be difficult to obtain either type.

I think it's a longer discussion about why you would want to pay your mortgage off so quickly with your mortgage at a very low fixed rate (I will argue with anyone who feel it's smart to pay off your mortgage for the peace of mind), but if you get rid of PMI and refi at current rates, you can always pay down your mortgage more quickly if you'd like.
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Old 07-02-2012, 01:06 PM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 18,649,828 times
Reputation: 6367
Try an equity accelerator program in which you pay your mortgage bi weekly. Or do it yourself, your mortgage balance will decline a lot faster.
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Old 07-02-2012, 04:10 PM
 
Location: Lexington, SC
4,281 posts, read 10,369,093 times
Reputation: 3701
Quote:
Originally Posted by wakefield622 View Post
Hubby & I are bouncing ideas around if we decide not to sell at the present time.

We are five years in so have another 25 yrs on our loan. Our PMI for our original mortgage of $196k is $310 per month. Pretty steep IMO.

If we refinanced would the PMI be lower now based on the fact we don't owe as much. I know we won't be at the 20% threshold to have it removed. But, lowering it would help with our idea to refi into a 15 yr loan and get this house paid down faster.

Our int. rate is LOW - 3.8%. So, not thinking we can be any better on that end.

Any thoughts?

wake

I guess the main question is can you rewrite the entire mortgage without the PMI of $310.00 per month?

If yes, the 2nd question is how much will it cost to rewrite it and what will the new mortgage rate (payment) be?

Then the 3rd question is will you be in the house long enough to realize the savings?

Example.

Present monthly mortgage payment is say $1,000.00 and include $300 PMI. The rate is not an issue.

Now say I can rewrite it with no PMI but at a higher rate so my monthly payment becomes say $900.00 per month (PMI gone) but it will cost me $4,800.00 to rewrite it.

Yes I am paying $100.00 per month less but it will take me 48 months to "pay off" the $4,800.00 rewrite cost.

If I sell the house within 48 months, I lose money.

The above way is also the way to look at rewriting a mortgage for a lower rate.

Hope this helps.
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