How hard is it to get rid of PMI? (loan, interest rate, loan) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

whoisjongalt · 03-18-2011, 08:53 PM

I'm considering buying a house for around $250K. If I were to put down only $40K, thereby triggering PMI, how difficult would it be to get it removed? For example, if I were to pay an extra $10,000 toward the principal over 2 years, would a bank remove the PMI (assuming the house is still worth at least 250K)? I'd prefer to put 20% down but it may end up being slightly less. I just don't want to be stuck paying PMI for years and years.

DowntownVentura · 03-18-2011, 09:56 PM

Frequently when people are so close to a standard 20% down, they get a second loan for the difference and not have PMI.

SmartMoney · 03-19-2011, 07:17 AM

The current guidelines are:

If you paydown your loan to 80% of the original sales price, you may request for the MI to be removed. This is provided your loan has been paid on time for the prior 24 months.

If you are trying to get the PMI removed due to equity, it still requires that your loan is paid on time for the prior 24 months and and appraisal is done.

The second option is at the lender's discretion. It's mandatory the MI be removed when the loan balance reaches 78% of the original purchase price.

piyf · 03-19-2011, 08:54 AM

Get the house cheaper, find one under 200k or get a 15yr loan and put down 3.5%. You'll still have PMI on the 15yr loan but it will be a lot less.

smartygurl · 03-19-2011, 10:00 AM

I just got rid of mine, and it was pretty easy. I paid my mortgage down to 78% LTV (Loan to value) and requested it be dropped, and it was.

piyf · 03-19-2011, 04:05 PM

Isn't there a number of years you must wait regardless even if it's below 78% on certain types of mortgages?

scuba steve · 03-19-2011, 06:03 PM

Quote:

Originally Posted by DowntownVentura

Frequently when people are so close to a standard 20% down, they get a second loan for the difference and not have PMI.

This. I've seen it a thousand times...

Elke Mariotti · 03-19-2011, 06:33 PM

Quote:

Originally Posted by danieloneil01

Isn't there a number of years you must wait regardless even if it's below 78% on certain types of mortgages?

2 years for conventional, 5 years for FHA

piyf · 03-19-2011, 06:56 PM

Thanks for the info

cheryjohns · 03-19-2011, 07:32 PM

You are better off with a 80/15/5. The 15% is at a higher interest rate, but the total still comes below what it would with PMI. Then concentrate on paying that 15% off as soon as possible.