Refinance to eliminate pmi?
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Refinance to eliminate pmi?
Posted by lsuCJ5 on 1/10 at 1:30 pm
I currently have a 4.25% 30 year fixed mortgage. I owe about 89 % on the loan right now. Is there any suggestions and or options that I could do to refinance right now and be able to get rid of PMI? I currently think I am paying $145 a month just for the PMI.


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Posted by Bacchus on 1/10 at 1:33 pm to lsuCJ5
If you refinance, but only have 11% equity, can't you just take out a second mortgage for the other 9% and avoid paying PMI?


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Posted by Tenforty1728 on 1/10 at 1:42 pm to Bacchus
Paying off mortgages early is always a contested topic on this board. I would suggest paying additional principal each month until you reach 20% equity if that's possible. You would avoid the refinancing costs. If you include PMI payments as interest and figure the interest rate you're borrowing at, paying this off early can save around 7%. That's a pretty solid return for your money.


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Posted by TheWiz on 1/10 at 1:49 pm to lsuCJ5
Under the new administration, PMI is now doubled. We refinanced 5% to 3.25%. We ultimately still saved about $150/month; which affords us enough to pay extra towards my wife MD student loans.


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Posted by lnomm34 on 1/10 at 2:25 pm to TheWiz
quote:

Under the new administration, PMI is now doubled


Say what??



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Posted by lsuCJ5 on 1/10 at 2:33 pm to Tenforty1728
I do pay what i can extra per month, but i would still wish i could make this pmi go away.


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Posted by sstig on 1/10 at 9:05 pm to lsuCJ5
Has the value of your home increased over the past few years? 20% of the appraised value is the number to focus on. How long since you purchased? May have had the market help you close the gap.


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Posted by foshizzle on 1/10 at 10:45 pm to Tenforty1728
quote:

Paying off mortgages early is always a contested topic on this board.


If all else is equal, paying off early given today's rates is not a good idea b/c the ROI is so low.

But this could be different b/c not all else is equal. Run the numbers in a spreadsheet and see.



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Posted by LSUGUMBO on 1/11 at 6:44 am to lsuCJ5
Ask your lender about prepaying PMI. I'm not sure of all the details, but it saved us a ton of money by bringing a little extra to closing. I think we paid $1000 up front to save paying $100/month for 2-3 yrs. I don't have the exact numbers but it was somewhere in that ballpark.


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Posted by lsuCJ5 on 1/11 at 7:52 am to sstig
i bought 2 years ago and the value has probably stayed the same. i'll call my guy that i got the loan with to see what he suggest to do.


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Posted by AbsolutTiger on 1/12 at 11:37 pm to lsuCJ5
PMI blows.

I know that's not helpful, just needed to say it.



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Posted by tirebiter on 1/14 at 5:57 pm to AbsolutTiger
From a tax payer's perspective I say it doesn't blow. If people don't want to pay PMI then they should save up enough money to give lenders a reasonable margin of safety in the event of housing declines, ie 20% DP, on any given house. Shit, you're already getting subsidized cut-rate mortgages. Compare 7% rates to 3.5% on a $300k house. Compare that to 9%-12% back in the late 70's early 80's. Current mortgages are a great deal, PMI or not.


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