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Old 05-29-2009, 10:27 AM
 
179 posts, read 500,308 times
Reputation: 79

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hello,
i bought my house in Dec. for 375k. rate: 5.2% payment with PMI of about 200 is 2550 or so.

i wanted to refinance to get rid of my PMI and also take advantage of the lower rates of 2 weeks ago! (lender promised 4.7%)

i got my appraisal and it was for 440K (major upgrades since bought house)


my question: how long does it take for the PMI to go away by itself if i do NOT refinance?

see, if i do refinance, i can NOT get a rate lower than the 5.2 that i have....so i'll basically be paying about 4k in closing costs to eliminate just the PMI. that means it'll take 20 months to recover the closing costs via the 200 monthly saving. does the PMI go away on its own at anytime?
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Old 05-29-2009, 10:30 AM
 
28,461 posts, read 75,357,605 times
Reputation: 18525
What type of loan do you have? What do the loan docs say?
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Old 05-29-2009, 11:20 AM
 
Location: Wake Forest, NC
835 posts, read 3,742,543 times
Reputation: 648
Based on your numbers- loan of $375k and value of $440k you are at 85% loan to value. Being that you are over 80% you are paying mortgage insurance- the question is how? You were paying it monthly and now you are being offered what is called Lender Paid Mortage Insurance- slightly higher rate in which the lender uses extra funds to pay mortgage insurance premium on your behalf. This is also why you can't get a lower rate than you already have. This extra can be as much as .50%. At this lower loan to value your mortgage insurance preimium will be lower than the $200 you are paying now.
Sounds like you told your LO that you wanted to eliminate MI and thats what he gave you. You should have been shown choices of both this structure as well as the lower rate and monthly mortgage insurance to make an informed decision as to what is best for you. Get a referral to a LO that someone you know has worked with and speak with them and let them know you want to look at refinance options because of the work you did to increase your value and see what they come back with. A thorough professional LO will give you options and explain the pro's and con's of both for your specific situation.
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Old 05-29-2009, 11:56 AM
 
179 posts, read 500,308 times
Reputation: 79
Quote:
Originally Posted by chet everett View Post
What type of loan do you have? What do the loan docs say?

30 year fixed. looking to do the same with the refi.
havne't looked at the loan docs. will do.

Quote:
Originally Posted by dad2jules View Post
Based on your numbers- loan of $375k and value of $440k you are at 85% loan to value. Being that you are over 80% you are paying mortgage insurance- the question is how? You were paying it monthly and now you are being offered what is called Lender Paid Mortage Insurance- slightly higher rate in which the lender uses extra funds to pay mortgage insurance premium on your behalf. This is also why you can't get a lower rate than you already have. This extra can be as much as .50%. At this lower loan to value your mortgage insurance preimium will be lower than the $200 you are paying now.
Sounds like you told your LO that you wanted to eliminate MI and thats what he gave you. You should have been shown choices of both this structure as well as the lower rate and monthly mortgage insurance to make an informed decision as to what is best for you. Get a referral to a LO that someone you know has worked with and speak with them and let them know you want to look at refinance options because of the work you did to increase your value and see what they come back with. A thorough professional LO will give you options and explain the pro's and con's of both for your specific situation.
i'm sorry. i should have explained better. the house was sold for 375k. i put down 10%. my loan as of right now is only 339K. i will be putting down another 10K once i do the refi. so my final loan amount after refi will be about 330K.
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Old 05-29-2009, 12:17 PM
 
Location: Wake Forest, NC
835 posts, read 3,742,543 times
Reputation: 648
I don't know what state your in or your credit score but you should be to get a rate lower than 5.25% depending on closing cost structure. To explain closing cost structure:
Lower rate= higher fees
Higher rate = lower fees
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Old 05-29-2009, 12:19 PM
 
179 posts, read 500,308 times
Reputation: 79
Quote:
Originally Posted by dad2jules View Post
i don't know what state your in or your credit score but you should be to get a rate lower than 5.25% depending on closing cost structure. To explain closing cost structure:
Lower rate= higher fees
higher rate = lower fees

va 780
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Old 05-29-2009, 12:36 PM
 
Location: Wake Forest, NC
835 posts, read 3,742,543 times
Reputation: 648
Quote:
Originally Posted by Ultimatetruth View Post
va 780

Probably should have checked this earlier but assuming your primary residence.

For a short term rate lock where you submit 1st then lock as you near end of process (I don't believe my clients should accept a higher rate because lenders aren't proply staffed). The longer the rate lock the higher the rate- always has been this way always will be this way.

4.875% with .5% broker fee and usual closing costs.
5.125% with no broker fee.
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