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We are nearing the 5 year mark on our FHA loan and were looking forward to being done with PMI. However, we just received a notice that the value of our house was revised and therefore PMI has been extended (due to the lower valuation). Is there anything to do to combat this? We are thinking about going for a re-fi, but I just want to make sure there are no other options first.
Your value was adjusted to lower than it was in 2010? Where do you live? I didn't know there were any parts of the country where values had gone down over the last 5 years.
Anyway, another option is to take the money that you would have paid for a refi and throw it at the loan balance. If you can get down to the required Loan to Value ratio (78% I think, but you'd want to confirm that first) to have the PMI removed, that might be a better option than doing a refi, unless you can also get a substantially lower rate, which is unlikely from 5 years ago, since they have hovered around the same rate for longer than that.
We are nearing the 5 year mark on our FHA loan and were looking forward to being done with PMI. However, we just received a notice that the value of our house was revised and therefore PMI has been extended (due to the lower valuation). Is there anything to do to combat this? We are thinking about going for a re-fi, but I just want to make sure there are no other options first.
Thanks in advance
Guessing your PMI was not set to drop off after 5 years. Did the lender just have the property appraised? What interest rate are you at now.
Huh? This doesn't sound correct. If you are eligible for it to drop off, it's a minimum of 5 years and your loan must reach 78% of the original purchase price or appraised value, whichever is less. The only exception I am aware of would be if you had late payments.
Is there any way you can type out what they wrote??? Sounds hinky.
The minimum is 5 years but on average with a 97.5% LTV, 3.5% down, it would take about 11 years to get to the 78% LTV for it to drop off. Unless you made additional payments or had a larger down it isn't likely to automatically drop off after 5 years.
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