LPMI and broker questions (real estate, mortgage broker, refinancing)

[mippity]

First, I've done some reading on lender paid pmi. I'm not sure if its is as prevent in SD (basically taking a slightly higher interest Rate to avoid pmi).

Also, I never knew anyone in the south to use a broker for real estate. Is it that common here? Would I benefit?

[mippity]

I'm apparently not smart enough to edit my post.


I meant to say prevalent. And to ask if anyone has done it?
Also, I wanted to clarify a broker instead of a bank. I hadn't heard of using a broker for loans until moving here.

[RosieSD]

With the exception of the mortgage on our first house 30 years ago, we've always used a mortgage broker - a good one - for all of our mortgages and refinancing.

He's saved us money over the years in terms of finding the best interest rates and keeping associated costs low. Just as importantly, he makes the whole process easier and gives great advice on what the best options are for us. For instance, if I was wondering whether lender-paid pmi was a good choice for us or not, he would sit down and explain the options and give us his opinion on whether it would be right for us or not. We would not get that same level of service or advice from a bank. Banks are only interested in locking you into the deal that will best serve them or that they'll be able to sell to another bank.

Others may see it differently, but in my opinion, a good mortgage broker is worth his/her weight in gold. (And, I underscore the word "good" because just like anything else, there are good and so-so brokers out there). If you're working with a good, experienced real estate agent, they can often point you to a good, experienced mortgage broker; that's how we found ours.

[someguy10]

+1 on using a good broker. A good way is to get a referral from someone you trust who has him/herself used that broker. Brokers in it for the long haul depend on providing real value to their customers -- otherwise the customers just use lendingtree.com or go to their usual bank.

As far as no-PMI loans, the broker could help or you can probably do the math yourself. I suspect if you hold the same loan 15+ years it will be cheaper to pay PMI and stay on top of home values.

Keep in mind lenders are required to drop PMI when your LTV is scheduled to hit 20% based on the original appraised value at closing. However, if you're in an area where values are appreciating, you will hit 20% sooner. Possibly a lot sooner if you have high (e.g., 4%+/year) appreciation. The minute your LTV ratio hits 20% (or whatever the PMI cutoff is), get in touch with your lender and request PMI removal. They will likely require paperwork and a new appraisal (paid for by you).

[thelopez2]

Originally Posted by mippity

Also, I never knew anyone in the south to use a broker for real estate. Is it that common here? Would I benefit?

Yes, and since you are in the PMI range I think a broker will be very helpful. LPMI, BPMI, 80/10/10, it becomes a matter or choice.

[mippity]

Very helpful. Thanks.